Termination Flashcards
what is an ex gratia payment
lump sum/compensation on termination
what is redundancy payments
payment for damages for unfair dismissal
which termination payments are taxable
those which are contractual
examples of termination payments that could come under the contract
pay in lieu of notice
holiday pay
lump sum pay
are ex gratia payments taxable
no
is statutory redundancy payment taxable
no
exempt
what is the termination package
the taxable part of the termination payments
if a payment is outlined in the contract is it included in the termination package
no
what schedule does holiday pay fall under
Schedule E
would retention of a company car (not stated in contract) come under package
yes
would write off of company loan (not stated in contract) form part of package
yes
under what schedule does the termination package go
schedule E
3 ways of determining the tax free amount of the termination payment
- basic exemption
- increased exemption
- SCSB
how do you know which method of tax exempt part to use
whichever gives highest result
what is the basic exemption
€10160 + €765 for each complete year of service
what is the increased exemption
€10160 + €765 for each complete year of service + additional €10000 - pension amount
who can claim the increased exemption
people with lump sum pensions less than 10000
who cannot claim increased exemption
if claimed relief in excess of basic exemption in previous 10 years
if lump sum pension > 10000
what does SCSB stand for
standard capital superannuation benefit
what is SCSB formula
[[a*b]/15] - c
a = average renumeration 36 months prior to termination
b = number of complete years of service
c = any lump sum from pension
what is an emolument
salary + benefits
