20/07/2026
Understanding the difference between taxable and non-taxable income is fundamental to getting your tax return right. Many Australians include income that doesn't need to be declared, while others miss income they're required to report.
Taxable income includes: salary and wages, business income, rental income, dividends and franking credits, managed fund distributions, capital gains (after applicable discounts), interest income, cryptocurrency income, gig economy income, government taxable payments (some Centrelink payments), and most foreign income.
Non-taxable or exempt income includes: genuine redundancy payments up to the tax-free limit, certain government payments (e.g., Family Tax Benefit, some Centrelink payments), workers' compensation payments (in most cases), gifts received (though gifts to you from a business may be assessable), the tax-free component of super death benefits paid to dependants, and proceeds from gambling or lottery wins (as Australia doesn't tax windfall gains).
The ATO publishes detailed guidance on what is and isn't assessable income — and the rules aren't always intuitive. For example, not all Centrelink payments are treated the same way for tax purposes. Some are included in your assessable income; others are not but must still be reported.
TaxSmart Cafe reviews all sources of income with every client to ensure nothing is omitted and nothing is incorrectly included. Getting this right is the foundation of every accurate tax return.
