I am paying an ETP with Legal Fee component. Is this taxable?

Question

I am paying an ETP with Legal Fee component.  Is this taxable?

 · Accepted Answer

CaroATO · Answer

Let's say the compensation is for loss of job or perhaps wrongful dismissal, then the fee would form part of the ETP (https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/leaving-your-job/employment-termination-payments-for-employees). If the fee does relate to wrongful dismissal for example, you're right in thinking the taxable component will be concessionally taxed (https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/leaving-your-job/employment-termination-payments-for-employees/how-etp-components-are-taxed#ato-TaxtreatmentofanETP). This'll be up to the ETP cap.

Explore tax & super topicsExplore tax & super topics

About usAbout us