The Australian Taxation Office has released the new rates applicable for redundancy payments for the 2012-2013 Financial Year.
2012-2013 Summary Guide – Taxing payments made under a redundancy
The above is the maximum amount that can be paid as the taxable component (post-1983) of a life benefit ETP and receive concessional tax treatment. Any excess is subject to PAYG withholding at 46.5%
|
Component |
Tax withheld |
Paperwork |
|
Accrued wages |
As for normal wages |
Payment summary – wages |
|
Annual leave |
31.5% |
Payment summary – Label A |
|
Leave loading |
31.5% |
Payment summary – Label A |
|
Long service leave pre 16 August 1978 |
Average marginal rate on 5% of amount |
Payment summary- Label B |
|
Long service leave post 15 August 1978 |
31.5% |
Payment summary- Label A |
|
Tax free amount first $8,806 plus $4,404 per completed year max. |
Nil |
Payment summary- Label D |
|
Life benefit ETP |
Must be taken in cash |
Must be taken in cash |
|
Tax-free ETP component |
Nil |
ETP Payment summary |
|
Taxable ETP component |
Under preservation age (55) at income year end
|
ETP Payment summary |
|
|
Reached preservation age (55+) at income year end:
|
ETP Payment summary |
|
Transitional ETP |
No longer applies after 30 June 2012 |
|