Is an ETP for a deceased employee tax free. Payment under $10,000
215 views
215 views1 replies
1 replies
215 views
1 replies
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
Hey @Kendi73,
Whether an ETP for a deceased employee is taxed or not depends on who receives the ETP. If its paid direct to a dependant or non-dependant, then tax will be withheld (including the Medicare Levy). There will be a tax-free component and a taxable component.
The difference between a dependant and non-dependant is the taxable component up to the ETP. For a dependant this will be tax free. Non dependant it will be taxed at 32% up to the cap.
If the payment goes to the trustee of a deceased estate the trustee will pay tax on the death benefit ETP. Tas will be withheld the same as if the payments made to a dependant or non-dependants, but the Medicare Levy will be exempt.
You can check out death benefit employment termination payment on our website.
All replies
Hey @Kendi73,
Whether an ETP for a deceased employee is taxed or not depends on who receives the ETP. If its paid direct to a dependant or non-dependant, then tax will be withheld (including the Medicare Levy). There will be a tax-free component and a taxable component.
The difference between a dependant and non-dependant is the taxable component up to the ETP. For a dependant this will be tax free. Non dependant it will be taxed at 32% up to the cap.
If the payment goes to the trustee of a deceased estate the trustee will pay tax on the death benefit ETP. Tas will be withheld the same as if the payments made to a dependant or non-dependants, but the Medicare Levy will be exempt.
You can check out death benefit employment termination payment on our website.
Featured articles
22 Apr 2024 · 6 min read time
15 Apr 2026 · 5 min read time
15 Apr 2026 · 4 min read time