Query re. SCSB calculation

K

Kemo_Sabe

Registered User
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I have a relatively simple query regarding the SCSB calculation formula for redundancy payments.

i.e.

(average annual earnings over the previous 3 years * number of years service/15) - lump sum pension benefit receivable = tax-free amount

I will be made redundant in September and will be using the SCSB method to calculate my tax-free lump sum. The only question I have about this is regarding the 'average annual earnings over the last 3 years'.

Is this on a gross basis (i.e. prior to pension contributions) or else as per my P60 statements (i.e. net of pension contributions)?

many thanks.
 
It is the Gross figure( before any pension deductions). Any BIK you paid can also be added to increase the gross. Also it is the 36 months immediately prior to your redundancy over which the average is calculated
 
If you receive an sizeable annual bonus, be careful that an anomaly doesn't arise whereby you just miss out on the inclusion of a large bonus in the SCSB calculation.
 
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