Examples of employment income
Employment income, also known as earnings, is pay you get for work you've done for an employer. What you and your partner earn may affect your payment rate.
Employment income includes
- allowances in excess of relevant expenses
- pay for piece work, for example, payment for an amount of fruit picked
- fixed and variable price contracts
- fringe benefits related to employment
- remuneration from your own private trusts, but not distributions
- remuneration from your own company, but not dividends
- regular drawings of income we recognise as being for work performed - even though you may account for them as non-remunerative lump sums, for example, directors’ fees
Employment income doesn’t include
- drawings by a principal from a sole trader business or partnership
- superannuation pensions
- personal injury compensation
- insurance payouts related to employment
- leave payments received as a lump sum on termination of employment
Calculating your payment rate
We calculate your payment rate by applying both an income test and an assets test. We apply the test that results in the lowest rate of payment.
Income free threshold
There’s no effect on the income test if your employment income, and other income, is less than the income free threshold. The threshold is different depending on whether you’re single or have a partner and if you get a pension or allowance. For every amount you earn above the threshold, your income support payment will reduce.
Read more about:
- income test for pensions
- income test for Newstart Allowance, Partner Allowance, Sickness Allowance and Widow Allowance
- income reporting
If you’re age pension age and still employed, you may qualify for the Work Bonus. This reduces the effect of your employment income on your payment rate. Read more about the Work Bonus.