I have been underpaid for a period of over two years. If I am paid the back-pay that is owed to me as a lump sum, is that considered part of my income for the current tax year?
If so, that means it would be taxed at a higher rate, as my correct salary should be just under the upper limit of an income tax bracket.
If it had been paid at the correct time it would have been taxed at the rate of the income tax bracket I am currently in.
If there is any choice, which would be the most tax efficient way for me to receive the owed back-pay?
This is in Australia.