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From 01/07/2012, the concessional tax treatment for Employment Termination Payments (ETPs) changed. Depending on the type of ETP, the concessional tax treatment is limited to the smaller of the ETP cap and the whole-of-income cap. Amounts paid in excess of these caps are taxed at the top marginal rate (plus Medicare levy). The ETP cap amount for 2016/2017 is $195,000, which is indexed annually. The whole-of-income cap amount for 2016/2017 is $180,000, which is not indexed. This cap is reduced by the other taxable payments (such as salary or wages) that an employee receives in the income year.
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Topic: 40892
