Exempt Income
Income that is not subject to tax and does not need to be included in your tax return.
Exempt income is income that is specifically excluded from taxation under Australian tax law. You generally don't need to declare it in your tax return, and it doesn't affect your tax calculations. However, some types of exempt income may still be relevant for other purposes, such as determining eligibility for government benefits or calculating Medicare levy reduction thresholds.
Common examples of exempt income include: the tax-free component of super benefits received after age 60, certain government pensions and allowances for veterans, some scholarship payments, income earned by certain non-profit organisations, native title benefits, and foreign employment income that has been taxed overseas under specific exemption provisions.
It's important to distinguish exempt income from non-assessable non-exempt (NANE) income. While both are not taxed, NANE income can affect other tax calculations — for example, employer super contributions above the concessional cap that are included in assessable income. Incorrectly treating assessable income as exempt can result in penalties, so check the ATO's guidance if you're unsure about a specific income type.