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Wage subsidy payments on your return for the 2022 tax year

Any wage subsidy payments you received during the 2021 to 2022 tax year should show on your tax return in the "Government subsidies" section.

You do not need to file an IR3 return to declare the wage subsidy. This can now be included on your individual income tax assessment.

Work out if you still need to file an IR3 return.

Individual income tax return - IR3

Wage and salary earners paid a lump-sum

If you are an employee and being paid the wage subsidy as a lump-sum by your employer instead of weekly payments there may be some tax implications. Although the lump-sum payment makes up 12 weeks-worth of payments, for tax purposes this treated as earned when you receive it. This makes a difference if you were paid the lump-sum payment on or before 31 March 2021.

If you received the lump-sum before 31 March 2021, income that would have normally been earned in the next tax year (after 31 March 2021) will be included in your income tax assessment for this tax year.

The impacts of this additional income are:

  • that you may be moved into a higher tax bracket which may result in a tax bill when we complete an automatic income assessment at the end of the tax year
  • if, as a result of receiving additional income, your total before tax income for the year exceeds $48,000 you will no longer qualify for the Independent Earner Tax Credit (IETC)
  • the additional income may also impact your entitlement to Working for Families Tax Credits
  • you may also receive a Student Loan bill for underpaying in relation to the amount of income you have received. 

Home-based childcare providers

Information to help you at this time can be found on the self-employed and other individuals page.

Wage subsidy and leave support payments - Issues for self-employed and other individuals

Last updated: 11 Jun 2021
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