Tax/retrenchment-related question

[Felch]

Hey guys, just after a bit of info.

I have been told that if you get retrenched from a job, that any entitlements owed to you (long service, etc) should be tax-free. I have also been told this is not the case by someone else

In the case relevant to me, the company is about to cease to exist very soon (been bought out), and all workers are being terminated, and will be re-hired by the new owners.

I have asked my accountant this question, but havent got an answer back yet from him, so i thought i would throw it out to you guys.

[wycbloods]

Your entitlements are not tax free but your redundancy payment is tax free for a certain amount per each year of service.

[Johno6]

correct wyc...as far as im aware

[Felch]

Is there a difference between a retrenchment and a redundancy ? I though they were basically the same, but don't know for sure.

Im still waiting to hear back from the accountant, will let you know what he says.

[gadj1976]

Hey Felch, check out the ato site... ato.gov.au. 99% of stuff can be found there.

From my old payroll experience.....

Pretty much you will get all your LSL and Annual leave paid out at your nominal tax rate. Where your LSL bridges pre 93, your tax will be slightly different as the 78-93 portion is taxed slightly differently. I don't think you're old enough to go back that far ;-)

Your notice period from memory is taxed at your nominal rate as well.

Cheers

Gadj

[cje]

your package is tax free any leave owing is taxed at normal rate i recieved 1 a few years ago worth 70k to me

[TroyGFC]

I got one last year, al ,sick,LSL all taxed at normal amount, seperation part very low tax for first i think $50k.