pay in lieu of notice

Hi i hope someone can explain this to me.i am after been made redundant from my job and after my severance package i also recieved my 12 weeks pay in lieu of notice.is the tax calculated on the pilon the same as if i was working out my weeks..example if i come out with 500euro a week should i get the same x 12 weeks.when i checked the numbers i was given it seemed i was taxed as if this was extra money.i would of got more by working the 12 weeks.

Hi Darrone
The difference is probably due to the fact that you do not have the benefit of 12 weeks tax credit and standard rate cut-off point which you would have had if you got paid over a 12 week period. Pay in lieu of notice is not normally taxable unless it was stated in your contract that you would be entitled to it on termination of employment. Maybe check this with your employer.

As stated you are taxed as per the payment made in one month so do not have the benefit of getting three months tax credits. If you expect to be back in work fairly soon, then the new place will adjust your pay accordingly. If you need to get a rebate you need to fill in a form and send it to your revenue office. I believe it used to a be a P50 form but it may have changed. Check out revenue.ie. Make sure to sign on immediately, don't wait till the 12 weeks are up.

elcato said:

Make sure to sign on immediately, don't wait till the 12 weeks are up.

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Isnt this a 'gardening leave' situation? Person is being paid their normal salary for 12 weeks, just being told to stay at home for the duration. Essentially they are still in paid employment for the duration of the 12 weeks.

csirl said:

Isnt this a 'gardening leave' situation? Person is being paid their normal salary for 12 weeks, just being told to stay at home for the duration. Essentially they are still in paid employment for the duration of the 12 weeks.

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Not for payment in lieu of notice, no. Termination date is the last day at work and the lump sum buys out the notice period.

thanks for all the reply's