Show download pdf controls
  • Schedule 11 – Tax table for employment termination payments

     

    Attention

    For payments made on or after 1 July 2014 to 30 June 2015

    This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by paragraph 12-85 (b) of Schedule 1 to the TAA.

    End of attention

    Using this table

    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

    You should use this table if you pay an individual an amount that is either:

    • an employment termination payment (ETP)
    • a delayed termination payment – that is, a payment that would be an ETP except it was paid more than 12 months after the relevant termination of employment (for more information, see Delayed termination payments).

    Find out more

    For information about ETP’s for employers and employees, refer to Taxation of termination payments.

    End of find out more

    Employment termination payments

    An ETP is a lump sum payment you make under either of the following circumstances:

    • to an employee when their employment is terminated
    • to an employee’s estate because their employment has been terminated due to death.

    ETPs include lump sum payments paid upon resignation, retirement or death. A payment from a super fund is not an ETP.

    A payment must generally be made within 12 months of termination to qualify as an ETP. A payment made outside 12 months is a delayed termination payment, unless we have given approval for the payment to be treated as an ETP.

    Tax treatment of ETPs

    ETPs can comprise of two different components:

    • Tax free component
    • Taxable component.

    You only withhold from the taxable component.

    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. The top rate of tax applies to amounts paid in excess of these caps.

    The ETP cap amount for the 2014-15 income year is $185,000. This amount is indexed annually.

    The whole-of-income cap amount for the 2014-15 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.

    Attention

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

    End of attention

    Find out more

    Refer to Taxation of termination payments.

    End of find out more

    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: 01 Jul 2014QC 39434