Taxing my redundancy

Peterk88

just a quick one company told me they are putting my redundancy through payroll and it will be taxed, iv tried to tell them it’s exempt and they won’t listen what shud i do

ELM327

Redundancy pay is not tax exempt, that's a common misconception.
I'm not an accountant so I'd recommend contacting your own accountant.

This is how redundancy is taxed:

Statutory redundancy:
(2 weeks pay per year of service, plus one week, capped at 600e per week) - Tax Free
Ex Gratia payment:
Basic Exemption is €10,160, plus €765 for each complete year of service - tax free
Increased Exemption of an additional €10,000 on top of the Basic Exemption  - tax free (can only be used once per 10 years)

Therefore everything above ((2weeks per year)*600)+600)+(10160)+(765 per year)) is taxable as if it were income.

Standard Capital Superannuation Benefit (SCSB): This is a different way of calculating tax for the Ex Gratia, usually for long services.

More info here

https://www.citizensinformation.ie/en/employment/retirement/income-tax-in-retirement/retirement-lump-sum-taxation/

Jacovs

Is it only statutory redundancy, or are you getting extra?

Far as im aware there is only an exemption on statutory redundancy, if they are giving you more than that then the extra is taxable.

Edit: better information above.

the_amazing_raisin

You should speak to a Qualified Financial Advisor, your company many offer some money to pay for this or they may arrange something with their accountants

Getting your redundancy through payroll doesn't mean it will be taxed the same as your salary, it'll likely be a separate line item

As ELM said you may be liable for tax depending on what the payment is an how you choose to tax it, a financial advisor will lay out the options