We have international employees that we have unfortunately made redundant. For the employees severance/redundancy payment we have utilised the business start date, to provide the maximum monetary benefit to the employee. When we are calculating the tax free portion we have used the start date in AU as this is how long they have been working in Australia. This has now been questioned and because we have provided severance based on original start date, we should using their original start date for the tax free portion of LSD.
I am trying to confirm that this is the correct interpretation of the rule.
Also how will the ATO know that the Years of service is based off a a date prior to them working in AU.
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