calculating tax on redundacy payment

J

johnybravo

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I work with An Post. They are looking to get rid of 1300 staff. With this in mind they have sent all staff 'letters of interest' telling them what they would get if they were interested in taking a deal.I was offered €114,000 and an €8,000 a year pension when I am 60 plus another €24,000. Or I could forgo the second lump sum and take €130,000 now.Can anyone tell me how much tax I would pay on these amounts based on earnings of €40,000. There is also an option to spread the payments over 5 years to limit your tax liability.Thanks.
 
First off statutory redundancy is exempt so 2 weeks for each week worked.

Then there is an other portion that is exempt:
€10,160 plus €765 for every year of service
or
the above plus an additional €10,000 minus any tax-free lump sum
or
Standard Capital Superannuation Benefit. Check http://www.askaboutmoney.com/showthr...534#post777534

If you have long service and a relatively high salary, SCSB works out better than the other options. RichieRuin

The balance is taxable at your marginal rate.

But you can avail of top slicing relief which is the average tax paid in the last 3 years.
 
I too will be made redundant in approx 4 months time. I dont know how much I will get yet as its with the Labour Court.
I was interested in what Joe 90 said about the different methods of taxing redundancy payment. What if you have long service (22 years) and relatively low earnings (because I went job sharing 12 years ago)?
This is my 1st time to be made redundant also. What method should I use?

Also can I ask how did An Post determine what a weeks wage was. For example was it from P60 or gross weekly earnings?
 
Looks like An Post are fairly generous. My wife is about to be made redundant and I was wondering how negotiable a redundancy payment in the private sector is?
 
Statutory is capped at €600 a week max. So if you worked 10years, no matter what your pay you only get €12,600 tax free from statutory. Its 2weeks per years service plus 1 week.
The SC is much better for high earners as you get 1/15 of your average basic for previous 3 years times years of service. So 5years service gives you a tax break of 33% your basic, which is about 18weeks TF.
 
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