Item 3 - Employer lump sum payments

Amounts to be entered for item 3 are shown on the Payment Summary (PS) as labels A and B and comprise lump sum payments from an employer for unused annual leave or unused long service leave.

In Tax these lumps sum payments amounts are entered at Item 1.

See Item 3 Lump Sum Payments on the ATO website for further information.

Labels R & H

Lump Sum A: Enter any amount of tax withheld for Lump Sum A payments in the Tax withheld column.

Lump Sum A code: For each lump sum A amount, the ATO requires a defining code. Select the appropriate code from the list:

R - genuine redundancy, invalidity segment of an employment termination payment or superannuation benefit or under an early retirement scheme
T - any other reason.

Lump Sum B: The amount at B was paid for unused long service leave that accumulated before 16 August 1978. Only five percent (5%) of this amount is taxable. Enter the full amount of the payment and Tax will calculate 5% and include the amount at label H

Enter any amount of tax withheld from Lump Sum B payments in the Tax withheld column.

Payment Summary

Other lump sums for early retirement scheme payments and redundancy payments, shown as Lump sum D on the Payment Summary if applicable will have been included in an Employment Termination Payment (ETP) and if not part of an ETP should not be included at any item in the tax return.

Lump sum payments in arrears shown as Lump sum E on the Payment Summary must be entered at item 24 Other Income.