Appendix 1: Taxation of Termination Payments

The following worked examples are from the ATO website:

http://www.ato.gov.au/Individuals/Working/In-detail/Leaving-a-job/Taxation-of-termination-payments/?anchor=If_you_are_an_employer#If_you_are_an_employer

These examples will help you to understand how the changes on 1 July 2012 work and which cap applies to the ETP:

Example 1: Employment termination payment with an invalidity segment

Example 2: Applying the whole-of-income cap

Example 3: Applying the ETP cap

Example 4: Including taxable income in the whole-of-income cap

Example 5: Compensation for unfair dismissal

Example 6: Compensation for harassment and discrimination

Example 7: Genuine redundancy

Example 8: Not a genuine redundancy

Example 9: ETP paid in instalments

Example 10: Multiple ETPs

Example 11: ETPs and tax losses

Example 12: Single ETP with excluded and non-excluded parts

Example 13: Single ETP with excluded (genuine redundancy) and non-excluded payments, and unused leave payments.

Topic: 40904