What's the tax treatment on an ex-gratia payment?

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RichATO · Accepted Answer

The additional ex-gratia payment is also known as a 'golden handshake'. Referring to the link below to Table A, the golden handshake payment is taxed at either 32% if the employee is under preservation age, 17% if preservation age or over, or 47% for any amount that exceeds the whole-of-income cap of $180,000. You can find all of the ETP withholding rates in Table A (https://www.ato.gov.au/tax-rates-and-codes/paygw-schedule-11-tax-table-from-13-october-2020-to-30-june-2024?page=5#ato-TableAWithholdingratesforETPs) on our web site.

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