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EMPLOYMENT TERMINATION PAYMENTS
30 June 2024
EMPLOYMENT TERMINATION PAYMENTS TAX RATES
Under preservation age
Up to $235,000 - taxed at a maximum
rate of 30% plus Medicare levy 2%.
Over $235,000 - taxed at top marginal
at rate 45% plus Medicare levy 2%.
Over preservation age
Up to $235,000 - taxed at a maximum
rate of 15% plus Medicare levy 2%.
Over $235,000 - taxed at top marginal
tax rate 45% plus Medicare levy 2%.
TAX FREE AMOUNT
Tax-free part of genuine redundancy
payments and early retirement scheme payments.
Base Limit $11,985 plus $5,994 for each complete year of service.
ETP - WHOLE OF INCOME CAP
Only applies to ETPs with a codes of O or P.
$180,000 minus other taxable income you earned throughout the income year.
Under preservation age
Up to $180,000 - taxed at a maximum
rate of 30% plus Medicare levy 2%.
Over $180,000 - taxed at top marginal
at rate 45% plus Medicare levy 2%.
Over preservation age
Up to $180,000 - taxed at a maximum
rate of 15% plus Medicare levy 2%.
Over $180,000 - taxed at top marginal
tax rate 45% plus Medicare levy 2%
Example:
Mark is 51 years old who earns $175,000. His
employer pays him an ETP of $8,000 code O.
Mark is under preservation age.
$180,000 minus wages $175,000 wages = $5,000.
This means only $5,000 of Mark's $8,000
is taxed at 32%.
The remainder $3,000 which is over the whole
of income cap is taxed at the top marginal tax rate.
$5,000 x 32% = $1,600 plus
$3,000 x 47% = $1,410.
UNUSED ANNUAL LEAVE AND ANNUAL LEAVE LOADING TAX RATES
Normal Termination
Pre - 18 August 1993 - 32%
Post - 17 August 1993 - Marginal Rates
Termination because of genuine redundancy, invalidity or early retirement scheme
Maximum - 32%
UNUSED LONG SERVICE LEAVE LOADING TAX RATES
Normal Termination
Pre - 16 August 1978 - 5% at Marginal Rates
Pre - 16 August 1978 to 17 August 1993 - 32%
Post - 17 August 1993 - Marginal Rates
Termination because of genuine redundancy, invalidity or early retirement scheme
Pre - 16 August 1978 - 5% at Marginal Rates
Post - 16 August 1978 - 32%
Google ATO employment termination payments
DISCLAIMER
We have clients from the following locations:
Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor,
Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle
Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.
Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba,
North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie
Island, Elimbah, Kippa-Ring.
We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and
sole traders Limited...
Liability Limited by a scheme approved under Professional
Standards legislation.
The information provided in the above documents is not intended to
be, nor should it be construed as tax advice. Any specific
recommendation for a client can only be done after their individual
circumstances have been determined by David Douglas Accountants.