Termination Payments and Tax
The tax issues surrounding termination payments have not changed all that much over the years. Unfortunately, what has changed in recent times is that terminations and redundancies have become more frequent!!
The first thing to note is that payments made to departing employees essentially fall into 3 different categories:
- Statutory Redundancy
- Ex-gratia Termination Payments
- Payments made on foot of a legal obligation, e.g. a payment required via the Employee’s employment contract.
Even though the rules and regulations governing the taxation of severance payments have been in place for a number of years, problems can still arise in practice. Irishtaxback.ie will be happy to assist you in reviewing and calculating your tax free entitlements. Simply contact one of our tax professionals for further information.
