Severance (Ex Gratia)

[idontworkhere]

Hi Everyone,

I was hoping someone could provide clarity on a tax question I had.

• In 2022, I received 3 months ex gratia severance payment from a company I worked for 8 months, after a large portion of the workforce had been let go
• This month - I have been let go from my new job of 8 months, due to poor industry conditions. This company is offering 1 month severance.

As per Irish tax law I believe - Lump sum payments received from an employer on retirement or redundancy may be taxable. However, there is a basic tax free exemption of €10,160 plus €765 for each completed year of service. The basic exemption may be increased by €10,000 in certain circumstances.

Does it matter that I am receiving two seperate severance payments from two seperate employers within 12 month period across 2022/2023. Will this second severance avail of the 10,160 exemption also?

Thanks in advance.

 

[jcount]

Hi,

did you ever get an answer for the above?

Thanks,

 

[AAAContributor]

Will this second severance avail of the 10,160 exemption also?

did you ever get an answer for the above?

The second severance can avail of up to €10,160 tax free.

An individual can receive the appropriate basic exemption amount from any number of employments with different employers. There is no restriction on the basic exemption in the legislation:

No 39 of 1997, Section 201, Exemptions and reliefs in respect of tax under section 123.

Exemptions and reliefs in respect of tax under section 123.

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