• Table A: Withholding rates for ETPs

    Attention

    Warning:

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

    End of attention
    Income component derived by your employee in the income year Age of person at the end of the income year that the payment is received Component subject to PAYG withholding Rate of withholding (including Medicare levy) Cap to apply

    Life benefit ETP – taxable component

    Payment is because of:

    • early retirement scheme
    • genuine redundancy
    • invalidity
    • compensation for personal injury, unfair dismissal, harassment or discrimination.
     

    Under preservation age

    Up to the ETP cap amount1

    31.5%

    ETP cap

    Preservation age or over

    Up to the ETP cap amount1

    16.5%

    ETP cap

    All ages

    Amount above the ETP cap amount1

    46.5%

    ETP cap

    Life benefit ETP – taxable component

    Payment is:

    • a ‘golden handshake’
    • non-genuine redundancy payment
    • severance pay
    • a gratuity
    • in lieu of notice
    • for unused sick leave
    • for unused rostered days off.
     

    Under preservation age

    Up to the relevant cap amount

    31.5%

    Smallest of ETP cap and whole-of-income cap2

    Preservation age or over

    Up to the relevant cap amount

    16.5%

    Smallest of ETP cap and whole-of-income cap2

    All ages

    Amount above the relevant cap amount

    46.5%

    Smallest of ETP cap and whole-of-income cap2

    Death benefit ETP paid to non-dependants – taxable component3

    All ages

    Up to the ETP cap amount

    31.5%

    ETP cap

    Amount above the ETP cap amount

    46.5%

    ETP cap

    Death benefit ETP paid to dependants – taxable component3

    All ages

    Up to the ETP cap amount

    Nil

    ETP cap

    Amount above the ETP cap amount

    46.5%

    ETP cap

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

    2 The whole-of-income cap amount for the 2013–14 income year and future years is $180,000. This amount is not indexed.

    3 A dependant includes both a child and spouse of the deceased. A child of the deceased includes all of the following:

    • an adopted child, stepchild or ex-nuptial child
    • a child of the deceased’s spouse
    • someone who is a child of the deceased within the meaning of the Family Law Act 1975 (for example, a child who is considered to be a child of a person under a state or territory court order giving effect to a surrogacy agreement).

    Spouse of the deceased includes another person (whether the same sex or opposite sex) and all of the following:

    • with whom the deceased was in a relationship that was registered under a law of a prescribed state or territory law
    • who lived with the deceased on a genuine domestic basis in a relationship as a couple.

    A dependant includes:

    • any person with whom the deceased had an interdependency relationship
    • a person who was a dependant of the deceased just before the latter died.

    Before accepting that a person is financially dependent.

    An interdependency relationship includes a close personal relationship between two people who live together, where one or both provides for the financial and domestic support and personal care of the other.

    If an ETP will be paid to the trustee of a deceased estate, no amount should be withheld.

    Last modified: 29 Oct 2013QC 34733