Salary or wage?

Salaries and wages are the most common types of employee payments. Everyone from bank CEOs to cafe baristas will either get a salary or a wage made to the individual in return for their services, with a contract of employment between the employer and employee.

Income is considered a salary if the work is regular and wages if it is not regular.  Both must be declared in full on your tax return – unless specifically exempted.

Another level to being a salary or wage earner is whether you are an employee, or a contractor. There is a difference, and it's an important one as it affects your tax situation. Find out more about it, here.

When you started your job you would have been asked to provide your tax file number (TFN), as well as your superannuation fund membership number. If you can't find your TFN, or need to apply for one, here's how.

By providing your employer with your TFN, you'll be ensuring that they have all the information they need to deduct the correct amount of tax from your salary or wage. If you're not sure how much tax should be taken out, you can use our rates and tables tax guide.

When the end of the financial year comes around, you'll need to lodge a tax return.  As a taxpayer, you have a number of rights, and obligations which you should be aware of, including what to do if you have a complaint regarding your tax, or about penalties.

Some salary packages include non-cash components, or fringe benefits. There is still a tax on these (FBT), but it is paid for by the employer – find out more about what fringe benefits are, and how they are treated for tax purposes, here.

Last reviewed 26/07/2012