Payroll Q&A – Genuine redundancy payments made to employees over the age of 65
I have an employee over 65 who is genuinely being made redundant due to their position no longer being required. They will receive redundancy payments per the council’s redundancy provisions.
My question is, how should those payments be taxed?
If the payment is not eligible for tax-free treatment under the bona-fide redundancy rules, are the payments taxed as an employment termination payment (ETP) and subject to the whole-of-income and ETP caps?
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Disclaimer: This article is based upon information available as at the time of publishing and may be subject to change.