Redundancy Calculator SCSB worked example

[David1234]

Hi,

Family member is potentially going to be made redundant in the next year and was asking me about the figures.

Term with employer- 8 years
Average salary last 3 years- €140k
Potential lump sum including statutory- €85k
No company pension in place and no other lump sum
SCSB figure of €74,667, (140k*(8/15)

Is the statutory figure of €10,200 (17 weeks * €600) added to the €74,667 for the tax free amount leaving them to pay tax on €133 (€85,000 - €74,667 - €10,200)?

or is tax payable on the €10,333 (€85,000- €74,667)?

Cheers
David

 

[1dave123]

Hi - Statutory redundancy is tax free. The SCSB figure mitigates the tax payable on the ex-gratia element of the redundancy payment. So using the figures above, tax would ultimately be payable on €133 not €10,333.