Income Types and Country Codes serve not just one but three crucial purposes!

Firstly, they help the Australian Taxation Office (ATO) identify the tax implications and map to a specific section of the Individual Income Tax Return (IITR).

Secondly, they help to identify whether a payer can claim an STP reporting concession, which can help avoid unnecessary contact by the ATO with the payer - for example, claiming a reporting concession for Closely Held Payees.

Lastly, they clarify the reporting obligations of the payer regarding the Income Type and Country Code. For instance, if a tax treaty is in place with the foreign country.

Salary and Wages (SAW)

Closely Held Payees (CHP)

Inbound Assignees to Australia (IAA)

Working Holiday Makers (WHM)

Seasonal Worker Programme (SWP)

Foreign Employment Income (FEI)

Definition – Assessable income paid to payees, who are Australian tax residents, subject to tax in another country, for work performed in that country if the qualification period is met. The payer must pay (or be liable to pay) the foreign government for the tax to qualify as foreign employment income. On finalisation, the Income Type must include an amount for foreign tax paid. If no foreign tax is paid (or payable) by the end of the financial year, then the income should be reported as Salary and Wages.

Payees – Australian tax residents employed/engaged by an Australian entity performing work in another country for a duration that meets or exceeds that country’s qualification period. 

Voluntary Agreement (VOL)

Labour Hire (LAB)

Other Specified Payments (OSP)