Exempt Military Income refers to certain payments made to members of the Australian Defence Force (ADF) that are not taxable and should be excluded from your tax return. These payments are typically made for operational service overseas or specific deployments classified as tax-exempt under Australian tax law.
How to allocate Exempt Military Income in TaxTank
If you've received exempt military income, it's important to record it correctly so it doesn't affect your taxable income calculations.
In TaxTank, we've added a custom category in the Work Tank called "Exempt Military Income". Simply select this category when allocating and save.
Once allocated to this category, the income will be excluded from your Tax Summary as it is tax-free. This ensures your tax position is calculated accurately, without including income that doesn't need to be reported on your return.
What types of military income are exempt?
The ATO classifies the following as exempt income for eligible members:
Income from certain deployments in operational areas
Payments made while serving on eligible international missions
Certain allowances and bonuses received during these postings
For more detail, refer to the ATO’s guidance on exempt foreign employment income.