Voluntary Redundancy - What to Take Into Account?

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OnLooker

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I work in an IT firm and they are looking to shed 20% of their workforce.

The main offer details are as follows:

- 4 weeks on top of your 2 weeks statutory (capped at €600 per week)
- An additional €250 per year of service

There are other additional items like training etc..

I've 6 years service and have no idea how Voluntary Redundancy works. What should I take into account when making my decision. How does the tax work? What kind of lump sum would I be looking at based my current salary of €77k? Also what kind of impact on my pension (Defined Contribution)? Could I bring it with me or is an offer made by the company based on its current worth?

I am in decent enough position because I could walk into another job with my technical skills. The company are quite flexible on the leaving date as well as they are letting people find jobs before leaving.

Any help greatly appreciated
 
Firstly, check the small print of any offer, many companies will put a cap on the maximum amount they will pay out.
Secondly, get the company to define what they mean by a week's salary for the 4 weeks. Does it include overtime or any other kind of allowances you get on top of your salary
Check will the provide a reference
Check the date of leaving, potentially if the Govt reduces the income levy in the next budget, it could be worth your while to leave in January if lower rates are applied
Statutory is tax free but there is a potential tax liability on anything above that. See attached for more details.

www.citizensinformation.ie/en/employment/retirement/income_tax_in_retirement/retirement_lump_sum_taxation.html

Based on a salary of 77k and assuming 6 complete years of service you will get
Statutory = €7800
4 weeks = €77k/52*6*4= €35538
additional = €1500
Total = approx. €45k

Check as well that you get paid for any partial year of service
 
You can claim an enhanced super redundancy of 30k extra from revenue one time only so you will pay very little tax if any on this amount
 
Yeah you get paid for partial years service. I am quite tempted by the offer as it would take quite some time to save that amount.
 
Raging Bull said:
You can claim an enhanced super redundancy of 30k extra from revenue one time only so you will pay very little tax if any on this amount
Click to expand...
How does this work? If I used this now would I lose out in the future pension wise or on retirement?
 
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