Private ruling: Assessable income - receipts v earnings
Date of advice: 14 March 2022
Published: May 2022
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is salary and wages income, earned in one financial year and received in the next, assessable in the year it is received? | A1: Yes. Taxation Ruling TR 98/1 Income Tax: determination of income; receipts versus earnings considers the appropriate method of determining when income is derived under section 6-5 of the Income Tax Assessment Act 1997 when income is earned in one tax year but received in another. Paragraph 42 of TR 98/1 states that salary, wages or other employment remuneration are assessable on a receipt's basis. This is irrespective of whether that income relates to a past or future income period. On this basis, your June 20XX monthly payment is assessable in the 20XX financial year, being the financial year, the payment was received.

Relevant facts and circumstances: You were an employee of company W and renumerated on a monthly basis. Your last monthly salary and wages payment for the 20XX financial year was deposited into your nominated bank account in early July 20XX, being the following financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5