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Redundancy payment

Discussion in 'Accounting, Tax & Legal' started by EmmaCroft, 21st Jan, 2009.

  1. EmmaCroft

    EmmaCroft New Member

    Joined:
    21st Jan, 2009
    Posts:
    1
    Location:
    Sydney
    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 :confused:

    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
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    8th Sep, 2007
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    1,448
    Location:
    Sydney, NSW
  3. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    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