Dear Community,
I have question regarding the ETP payment for Tax purposes.
In the scenario that employee resigns and give out 3 month notice period as per the employment contract (both parties need to give 3 month notice). The details are:-
- he gives resignation letter on 10/08/2021 & work through 10 Sep 2021 (1 month)
- the employer decided to pay out the rest of 2 months on the last day of 10 Sep 2021 instead of allowing the employee to work out the notice period.
In this case, does the 2 month “notice of resignation period� would be treated as ETP payment for tax purposes.
https://www.ato.gov.au/business/your-workers/in-detail/taxation-of-termination-payments/?page=2
As per ATO website, I understand that 'payments in lieu of notice of termination’' would be considered as ETP payment. However, if the in lieu of notice which arise from resignation as per above scenario, would it also be considered the same as normal payment in lieu of notice which need to be taxed as ETP payment ?
Thank you in advance
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