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tax query

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  • 17-01-2009 6:25pm
    #1
    LegacyUser
    Registered Users Posts: 166,026 ✭✭✭✭


    hi i work for a company that wants a certain number of staff to leave due to reduced demand.

    this was a voluntary option which is called a career break. the difference being that its an incentivesed career break. i applied for a 3 year career break and will receive 75 percent of 1 years salary for doing so.

    can anyone tell me what this will mean for tax purposes? will i lose most of the payment which will be made to me after normal tax and prsi deductions have been taken out? can i get another job? or if i couldn't get one could i sign on? i don't want to lose stamps etc


    if anyone could help i would greatly appreciate it

    thanks
    b.


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    #2
    swanvill
    Registered Users Posts: 276 ✭✭swanvill


    Hi,Based on the info supplied it is very hard to make a call about your tax. If they pay you in one lump then you could fall into the top rate of tax but when you file a tax return (form 11s) at the end of the year, you could be entitled to a refund depending on your circumstances. Or if unemployed you can submit your P45 for a tax refund from the revenue. However if they pay you 75% of your salary in 12 monthly payments then you would pay less tax/PRSI then you do now, as you are earning less. If it is classed as a termination payment due to restructuring, then there is scope for receiving a portion of it tax free.

    Regarding social welfare that will depend on how the lump sum is paid and what PRSI contributions you have made and other factors.

    Sorry to be so vague but it is hard to call without specifics about how the payment is made, personal circumstances etc


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