Im study for my university degree by correspondence and I am needing to answer the following question but... I am getting myself confussed with early termination payments and redundancy payments. Is any one able to point me in the right direction as I seem to be going around in circles 50 year old Nathan, who has worked for a company since 1 July 1993 and due to a sharp downturn in activity the company shuts down in November 2007. On 15 November 2007, Nathan was paid a lump sum of $163,000 (comprising $43,000 in salary, $20,000 in lieu of annual leave and $100,000 redundancy payment). Adivse tax implications of the lump sum paid to Nathan. Many thanks for your help, Emma
Hi Emma, Have you googled "Bonafide Redundancy"? You will want to read Bona fide redundancy payments and approved early retirement scheme payments and there is a hyperlink called "tax-free limit" Out of interest what subject and course are you doing at uni? Cheers, Dan
Salary & unused annual leave are not an ETP, covered by s.6-5 ITAA97 & s.26AC ITAA36 respectively. A bona fide redundancy is an ETP with consequent concessional treatment. Cheers, Rob
