Tax-free Threshold for Redundancy Payments
From 1 July 2013, the tax-free threshold for redundancy payments is as follows:
$ 9,246 (formerly $8,806 for 2012-2013); plus
$ 4,624 (formerly $4,404 for 2012-2013) for each completed year of service
Employment Termination Payment (ETP) Cap
For 2013-2014, the ETP cap amount is $180,000 (formerly $175,000 for 2012-2013).
Whole-of-income Cap for Non-excluded ETPs
The whole-of-income cap for non-excluded ETPs only remains at $180,000 for 2013-2014.
2013-2014 Termination Guide – Taxing ETPs for Redundancy
| Component | Tax Withheld | Paperwork |
| Annual leave and 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 of the first $ 9,246 plus $ 4,624 for each completed service year |
Nil | Payment summary – Label D |
| Excluded ETP – taxable ETP component | ETP Cap
Under preservation age (55) at income year end:
Reached preservation age (55+) at income year end:
|
ETP payment summary |
| Non-excluded ETP – taxable ETP component | Whole-of-income Cap*
Under preservation age (55) at income year end:
Reached preservation age (55+) at income year end:
|
ETP payment summary
|
2013-2014 Termination Guide – Taxing ETPs for Resignation, Retirement or Dismissal
| Component | Tax Withheld | Paperwork |
| Annual leave and loading | Average marginal rate | Payment summary – Wages |
| Long service leave pre- 16 August 1978 | Average marginal rate on 5% of amount | Payment summary – Label B |
| Long service leave between 16 August 1978 to 17 August 1993 | 31.5% | Payment summary – Label A |
| Long service leave post- 17 August 1993 | Average marginal rate on all | Payment summary – Wages |
| Excluded ETP – taxable ETP component | ETP Cap
Under preservation age (55) at income year end:
Reached preservation age (55+) at income year end:
|
ETP payment summary |
| Non-excluded ETP – taxable ETP component | Whole-of-income Cap*
Under preservation age (55) at income year end:
Reached preservation age (55+) at income year end:
|
ETP payment summary |
* The whole-of-income cap is reduced down by all other taxable payments including:
- wages;
- lump sum leave; and
- excluded ETPs (if applicable).