Tax on Voluntary Parting payment

M

MeathCommute

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Hello. My job is being transitioned to another company and a Voluntary Parting package is being offered to us. I'll get €128k if I take it. That's double my wages. What tax am I liable to pay on that, or does it depend on my personal circumstance? My wife is self employed and earns around €10k in all. I currently earn €64. We are jointly assessed for tax
 
Ok well the statutory portion is always exempt then the balance is taxable but you can get relief under 3 basis of calculation.
http://www.revenue.ie/en/tax/it/leaflets/it21.html

If you are in your job for a number of years the SCSB usually gives the best result.

The other relief was top slicing which was abolished from 01.01.2014.
 
Just a word of caution - due to the use of the word transitioned in the OP - if you are going to be rehired by the other company, your redundancy payment may not qualify for exemptions.
 
mandelbrot said:
Just a word of caution - due to the use of the word transitioned in the OP - if you are going to be rehired by the other company, your redundancy payment may not qualify for exemptions.
Click to expand...

Thanks Mandelbrot. We have a decision to make in that it's either the package or the transition but not both. They say there is going to be a moratorium on joining the new company for those who opt for the package, of a year
 
Just in closing on this to help others with similar queries.

I paid no tax on my voluntary parting lump sum as it was all calculated as tax free under the redundancy Superannuation Benefit Calculation = (average three year gross salary) X years of service/15. My years of service is 30 years exactly.

Thanks for all the help with this
 
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