Overview

Lump sum E payments are special income items that relate to work performed in earlier financial years but are taxed in the year they are received, not in the years they were accrued.

Key Rule

  • If lump sum E payments are received in a financial year (e.g., FY 2025), they are assessable in FY 2025, even if they relate to earlier periods such as FY 2021 or FY 2022.

Example Scenario

  • A taxpayer received lump sum E payments in FY 2025 that relate to work done in FY 2021 and FY 2022.

  • The amounts are:

    • FY 2021: 28,013

    • FY 2022: 35,822

    • Total Lump Sum E = 63,835

How LodgeiT Handles This

  • The total lump sum E amount (63,835) is automatically included in the 2025 tax return.

  • In the return, this appears under “Other Income Category 1” as 63,835.

  • This confirms that LodgeiT has correctly captured and calculated the lump sum E income for the relevant tax year (2025).

Summary

  • Lump sum E = Taxable in year received (not when earned).

  • LodgeiT correctly reports this under “Other Income” in the year of receipt.

  • Always cross-check the total lump sum E against the “Other Income” section of the return for accuracy.