# redundancy lump sum



## hopalong (10 Apr 2011)

*dear moderator,please let me know if this query is in the wrong forum,as i had it in the taxation forum.        i am a little confused on the following;      Taxation of lump sum*(redundancy)

  Since 1 January 2011 there is an overall limit of €200,000 on the  amount of the tax-free lump sum. Lump sum payments above that limit will  be taxed as follows:  

*Taxation rates for lump sum*   Amount of lump sum       Income tax  rate     Up to €200,000       0%        €200,001 - €575,000       20%         Over €575,000       Taxpayer's marginal rate       The amount of your  lump sum that is subject to tax is not subject to social insurance (PRSI), but the Universal Social Charge  may be payable.     does this mean if one receives a total of  180,000euros when exiting their job,that there would be no tax on their  total,except there may be usc payable?


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## paperclip (25 Apr 2011)

Really? So, if I was to get voluntary redundancy for around 40,000euro, I'd get it tax free?

I was under the impression that only the first 20,000 is tax free?


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## huskerdu (25 Apr 2011)

I think that 200K is for retirement lumpsums, not redundancy. 
Redundancy payouts over about 20K are taxed. 

The taxation of redundancy payments is described here. 

http://www.citizensinformation.ie/e..._retirement/retirement_lump_sum_taxation.html


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## wbbs (25 Apr 2011)

How long you are working for the company has an impact on the tax paid, the statutory portion is tax free but calculations needed to figure it out after that, not the same for everyone.


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