Regarding Inder’s Termination payment.
Inder received the following payments from his employer
Gross salary from employer from the 1st of July 2018 to 30th of May 2019 = $57,000
Genuine redundancy payment received on the 30th of May 2019 = $73,000
Unused annual leave = $26,000
Unused long service leave = $12,800
Advise Inder how much tax is payable on the above termination payments. Assume no deductions to claim. You must clearly identify any ETP tax offset.
Please show the steps used for calculations as well clearly.
In case of the above question there are some information which is missing.Inder's age is not clear.The tax on ETP is slabbed based on age.For computation sake we take the take rate @ 32%.
The whole of income cap for ETP for 2019-20 income year is capped at $ 180,000.
In this question the Gross salary received by Inder is offered.
Genuine redunancy payment might contain element which is taxable and tax free which is computed based upon a formula. In order of deficiency of information here we assume that the entire Genuine redunancy payment is offered to tax.The unused leave and Unused long service leave are not considered as ETP.
| Particulars | Amt |
| Whole of income Cap | 180,000 |
| Gross salary | (57,000) |
| Unused leave | (26,000) |
| Unused long service leave | (12,800) |
| Genuine redundancy payment | (73,000) |
| Non excluded income | 11,200 |
| Tax @ 32% | 2,576 |
Regarding Inder’s Termination payment. Inder received the following payments from his employer Gross salary from employer...
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