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Redundancy tax regarding financial year

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My employer has given me a genuine redundancy. They have given me the option to either work out my notice period which will take me into the next financial year (20/21) or I can take my notice period in leiu which would mean my redundancy will fall in this financial year (19/20).I beleive I will get my annual and long service leave payed out as an ETP. Would it matter or be of any benifit to what financial year I recieve my redundancy? 

 

Is it possible to claim some tax back on an ETP as mentioned above if during the next financial year I stuggled to find a job and have a low income? 

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Hi @Aaronvs ,

 

Thanks for your question.

 

A genuine redundancy is tax-free up to a limit based on your years of service. Genuine redundancy payments in excess of your tax-free limit will make up part of your ETP

 

Lump sum payments for unused annual leave and long service leave don't form part of your ETP. They're separately reported on your income statement at lump sum A or B. These payments may be concessionally taxed. The tax rate depends on the type of termination, date of accrual and type of leave.

 

 

The tax-free component of a genuine redundancy is not reported on your tax return and doesn't form part of your taxable income.

 

If you receive the ETP in 20/21 and have a low taxable income overrall for the year then you may be eligible for a refund. It'll depend on your total taxable income, amounts withheld, offsets, deductions and other credits/ debits were applicable.

 

I hope this helps and thanks for posting,

JasonT

1 REPLY 1
Highlighted

Most helpful response

Community Support

Replies 0

Hi @Aaronvs ,

 

Thanks for your question.

 

A genuine redundancy is tax-free up to a limit based on your years of service. Genuine redundancy payments in excess of your tax-free limit will make up part of your ETP

 

Lump sum payments for unused annual leave and long service leave don't form part of your ETP. They're separately reported on your income statement at lump sum A or B. These payments may be concessionally taxed. The tax rate depends on the type of termination, date of accrual and type of leave.

 

 

The tax-free component of a genuine redundancy is not reported on your tax return and doesn't form part of your taxable income.

 

If you receive the ETP in 20/21 and have a low taxable income overrall for the year then you may be eligible for a refund. It'll depend on your total taxable income, amounts withheld, offsets, deductions and other credits/ debits were applicable.

 

I hope this helps and thanks for posting,

JasonT