Tax treatment of ETPs



This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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On 1 July 2012, the concessional tax treatment for 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 highest marginal rate (plus Medicare levy).

The ETP cap amount for the 2013–14 income year is $180,000. This amount is indexed annually.

The whole-of-income cap amount for the 2013–14 income year is $180,000. This amount is not indexed. This cap is reduced by the other taxable payments that your employee receives in the income year. For example, salary or wages that you have paid to your employee.


In some cases, you may need to include an ETP in the taxable payments when working out the whole-of-income cap.

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Find out more

For more information, refer to Taxation of termination payments.

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The ETP payment summary has an ETP code that you use to describe the type of ETP and which cap has been applied to it. For more information about the codes, see Payment summaries.

Last modified: 29 Oct 2013QC 34733