# Awarded compensation for Unfair Dismissal - is it taxable?



## maebee (7 Mar 2012)

My niece was today awarded €10,000 compensation by the Rights Commissioner for unfair dismissal. She was told that she will have a cheque within the next fortnight but she forgot to ask if this amount will be taxable. Can anybody advise please? Thanks.


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## sean.c (8 Mar 2012)

It depends and it looks fairly complicated;

[broken link removed]

As far as I can make out, a straight-forward award is not taxable. However, any element of the award that may be considered salary due, is taxable as normal.

ie. say your daughter was award 2k in salary, and 8k in compensation.  The 2k would be taxable.

I THINK!  the leaflet isn't at all clear.  Best to consult the taxman when teh award comes through.

sean.

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## maebee (9 Mar 2012)

Thanks for the reply Seán. We looked at the revenue site and we also found it confusing. None of the award is salary. She was given her final salary & P45 in December. Although the Rights Commissioner also awarded her re-instatement, she won't be returning to that job. Guess we'll have to wait til the cheque arrives. Thanks again for taking the time to reply.


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## Stephen Casey (26 May 2016)

I won my unfair dismissal case  I had  very little  loss of  wages  but the  company  deducted  emergency  tax  and  all the other  charges  and I only  ended up with  half of the  payment


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## dublin66 (13 Jun 2016)

My understanding is that unfair dismissal payments are for loss of earnings and are therefore taxable.  However it is a payment arising from loss of employment so that the statutory reliefs apply.  Basic, increased exemption and SCSB should be available.  The title of the Revenue leaflet is misleading in that it also applies to resignations, dismissals etc.  
*IT21 - Lump Sum Payments (Redundancy/Retirement)*


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