Tax Table For ETP's

(last updated 05/06/2014)

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This table summarises the tax treatment of Eligible Termination Payments (ETP's).



ETP tax tables withholding rates from 1 July 2014


Income component derived by your employee in the income year
Age of person at the end of the income year that the payment is received
Component subject to PAYG withholding
Rate of withholding
Cap to apply
Life benefit ETP – taxable component
Payment is because of:
early retirement scheme
genuine redundancy
invalidity
compensation for personal injury, unfair dismissal, harassment or discrimination.
Under preservation age
Up to the ETP cap amount1
32%
ETP cap
Preservation age or over
Up to the ETP cap amount1
17%
ETP cap
All ages
Amount above the ETP cap amount1
49%
ETP cap
Life benefit ETP – taxable component
Payment is:
a ‘golden handshake’
non-genuine redundancy payment
severance pay
a gratuity
in lieu of notice
for unused sick leave
for unused rostered days off.
Under preservation age
Up to the relevant cap amount
32%
Smallest of ETP cap and whole-of-income cap2
Preservation age or over
Up to the relevant cap amount
17%
Smallest of ETP cap and whole-of-income cap2
All ages
Amount above the relevant cap amount
49%
Smallest of ETP cap and whole-of-income cap2
Death benefit ETP paid to non-dependants – taxable component
All ages
Up to the ETP cap amount
32%
ETP cap
Amount above the ETP cap amount
49%
ETP cap
Death benefit ETP paid to dependants – taxable component
All ages
Up to the ETP cap amount
Nil
ETP cap
Amount above the ETP cap amount
49%
ETP cap
1. The ETP cap amount for the 2014-15 income year is $185,000. The amount is indexed annually.
2. The whole-of-income cap amount for the 2014-15 income year and future years is $180,000. This amount is not indexed.



ETP tax tables withholding rates from 1 July 2013 to 30 June 2014


Income component derived by your employee in the income year Age of person at the end of the income year that the payment is received Component subject to PAYG withholding Rate of withholding (including Medicare levy) Cap to apply
Life benefit ETP – taxable component.
Payment is because of:
  • early retirement scheme
  • genuine redundancy
  • invalidity
  • compensation for personal injury, unfair dismissal, harassment or discrimination.
Under preservation age Up to the ETP cap Amount 1 31.5% ETP cap
Preservation age or over Up to the ETP cap Amount 1 16.5% ETP cap
All ages Amount above theETP cap amount 1 46.5% ETP cap
life benefit ETP – taxable componentPayment is:
  • a ‘golden handshake’
  • non-genuine redundancy payment
  • severance pay
  • gratuity
  • in lieu of notice
  • for unused sick leave
  • for unused rostered days off.
Under preservation age Up to the relevant cap amount 31.5% Smallest of ETP cap and whole-of-income cap 2
Preservation age orover Up to the relevant cap amount 16.5% Smallest of ETP cap and whole-of-income cap 2
All ages Amount above  the relevant cap amount 46.5% Smallest of ETP cap and whole-of-income cap 2
Death benefit ETP paid to non-dependants. Taxable component 3 All ages Up to the ETP cap amount 31.5% ETP cap
Amount above the ETP cap amount 46.5% ETP cap
Death benefit ETP paid to dependants – taxable component 3 All ages Up to the ETP cap amount Nil ETP cap
Amount above theETP cap amount 46.5% ETP cap
  1. The ETP cap amount for the 2013–14 income year is $180,000. The amount is indexed annually.
  2. The whole-of-income cap amount for the 2013–14 income year and future years is $180,000. This amount is not indexed.
  3. A dependant includes both a child and spouse of the deceased. A child of the deceased includes all of the following:
  • an adopted child, stepchild or ex-nuptial child
  • a child of the deceased’s spouse someone who is a child of the deceased within the meaning of the Family Law Act 1975 (for example, a child who is considered to be a child of a person under a state or territory court order giving effect to a surrogacy agreement).
   
Spouse of the deceased includes another person (whether the same sex or opposite sex) and all of the following:
  • with whom the deceased was in a relationship that was registered under a law of a prescribed state or territory law
  • who lived with the deceased on a genuine domestic basis in a relationship as a couple.
  A dependant includes:
  • any person with whom the deceased had an interdependency relationship
  • a person who was a dependant of the deceased just before the latter died. before accepting that a person is financially dependent.
An interdependency relationship includes a close personal relationship between two people who live together, where one or both provides for the financial and domestic support and personal care of the other. If an ETP will be paid to the trustee of a deceased estate, no amount should be withheld.

Copyright 2014. My Tax Zone.