Redundancy and tax
- Thread starter Dylan33
- Start date
Add all your taxable income for the year minus all your allowable deductions, then apply that income to the tax tables.
2016 tax tables might be different, so you wont be accurate.
And even when you receive the redundancy payment, will you be working a new job for more income?
The hard answer is, unless you know what income and duductions are going to be in 2 years, you are just not going to be able to work it out at the click of a finger.
pinkboy
2016 tax tables might be different, so you wont be accurate.
And even when you receive the redundancy payment, will you be working a new job for more income?
The hard answer is, unless you know what income and duductions are going to be in 2 years, you are just not going to be able to work it out at the click of a finger.
pinkboy
You will receive a statement from your employer setting out the various components of your termination pay - redundancy amount, holiday pay, long service leave etc.
In the case of a genuine redundancy, there are different tax rates for each component.
It is essential to get good advice to ensure you pay the correct tax. Get it wrong and the tax will much higher than it should be.
Hubby received a redundancy layout and we figured the accountant fee excellent value as hubby paid minimal tax on a six figure payout.
Marg
In the case of a genuine redundancy, there are different tax rates for each component.
It is essential to get good advice to ensure you pay the correct tax. Get it wrong and the tax will much higher than it should be.
Hubby received a redundancy layout and we figured the accountant fee excellent value as hubby paid minimal tax on a six figure payout.
Marg
The redundancy element has a concessional tax rate provided you are aged under 65 when it is paid otherwise all bets are off and its just ordinary income (A very unfair change bought in by K Rudd) . The redundancy element should be calculated by the employer and is based on the term of full year employment. The whole of that part is tax free. 2014/15 its $9514 plus $4758 for each full year of service. ie ($61K or so) The formula is explained here. It will be reported at Label D of the PAYG summary when you get it. It doesn't even go in the return.
Any excess above the tax free is included on a ETP payment summary. The tax issues get further complicated ehre. You can no longer choose for an ETP to be switched to super.
Then you may have unpaid leave etc...All taxed as ordinary income.
In the year of payment watch out for the surcharges !!!
- Medicare Levy surcharge (You and spouse / partner better have private health and keep it all tax year !!)
- HELP / HECS debts
- Extra 15% tax on contributions if "income" exceeds $300K.
etc
Lots of issues and some strategies too. Well worth tax AND planning advice as early as possible.
Any excess above the tax free is included on a ETP payment summary. The tax issues get further complicated ehre. You can no longer choose for an ETP to be switched to super.
Then you may have unpaid leave etc...All taxed as ordinary income.
In the year of payment watch out for the surcharges !!!
- Medicare Levy surcharge (You and spouse / partner better have private health and keep it all tax year !!)
- HELP / HECS debts
- Extra 15% tax on contributions if "income" exceeds $300K.
etc
Lots of issues and some strategies too. Well worth tax AND planning advice as early as possible.
