Mercia | Taxation, Business & Finance Advisers

Sometimes it hard to know what incomes are, so we’ve compiled a quick list to help you understand the incomes and what they are. Just click one of the headings and it will take you to the answer you need!

1. Shares or Managed Funds
2. An ABN
3. Foreign Income
4. Capital Gains
5. Paid Parental Leave
6. Pensions/payment from your superannuation?
7. Employee share scheme
8. Net Business Income

1. Shares or Managed Funds

   In a managed fund, your money is pooled together with other investors. An investment manager then buys and sells shares or other assets on your behalf. You are usually paid income or ‘distributions’ periodically. The value of your investment will rise or fall with the value of the underlying assets.

2. An ABN

   An Australian Business Number (ABN) is a unique 11 digit number that identifies your business to the government and community. An ABN doesn’t replace your tax file number, but it is used for various tax and other business purposes.

3. Foreign Income

   If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare any foreign income in your income tax return. Foreign income includes: foreign pensions and annuities, foreign employment income and foreign investment income.

   NOTE: This excludes any income received as a gift.

4. Capital Gains

   A Capital Gain(s), also known as CGT is a profit from the sale of an investment, like a property or shares. A Capital Gain (or capital loss) is calculated by deducting the cost price from the sale price.

5. Paid Parental Leave

   The Paid Parental Leave scheme allows eligible parents to take time off work to care for a newborn or recently adopted child. The financial support provided by the scheme complements parents’ existing birth or adoption entitlements to paid and unpaid leave.

6. Pensions/payment from your superannuation?

   Pensions include payments from centerlink, for example they could include unemployment benefits, or a disability benefit. Pensions could also include your own private superannuation monies that have been paid to you. When you receive these payments you will receive a form summarising the payments you have received, send this to us using our upload function back on the online tax return and it will activate you camera on your smart phone.

7. Employee share scheme

   Unlikely to be held by Chefs and hospitality staff. They are usually issued to senior management of companies listed on the stock market. Employee share schemes (also known as employee share purchase plans or employee equity schemes) give employees shares in the company they work for, or the opportunity to buy shares in the company. Share purchase plans offer eligible employees the chance to purchase shares, sometimes through a loan from their employer.

8. Net Business Income

   Net Business Income means gross income (deposits received from customers) less deductions (payments made  to suppliers) you  incurred in producing your business income. The costs deducted from your income is your Net Business Income (or loss). To understand more about starting your small business in 6 simple steps <click here>.