Termination agreement exgratia

Could you please advise how an exgratia payment would be taxed when paid due to termination agreement after employee made proceedings?

Hello,

From a tax perspective in the usual way for exgratia payments ..

So the payment may be exempt from income tax ..best of basic exemption, increased exemption or scsb..

However a lot depends on the wordings if the agreement between the parties.. the employer mightn’t be so willing to have favourable exgratia language and the payment might just be taxable ... what were the proceedings ???

This is one to have the agreement checked by tax consultant if the amount is sizeable

It can also depend on the nature of the proceedings. Unfair dismissal, or related claims, are generally treated as remuneration and taxed under the termination payment benefits. Bullying, harassment and other similar claims can be totally exempt under a different tax provision.

It was going through wrc, and high court but the termination agreement settled after first hearing.