Tax and your redundancy payout
Redundancy payments are taxed differently to normal payments from your employer.
When you're made redundant you'll receive information about your redundancy payments from your employer. Your payment will consist of up to three components:
- genuine redundancy payment (the tax free portion). Note if you're over Age Pension age, you're not eligible for a genuine redundancy payment and your entire payout will be treated as an ETP.
- an employment termination payment (ETP), and
- other redundancy payments.
How does the date of your redundancy change your tax?
Depending on individual situation, you may wish to consider deferring your redundancy date until after the end of the financial year, when your marginal rate of tax may be lower, or entitlements higher. Understandably, this may not always be possible, however you may be able to use your long service leave or accumulated leave to delay your departure date. You may want to discuss this with your HR department.
We're here to help
At TelstraSuper we're here to help you build a secure financial future. TelstraSuper Financial Planning can help you work out the best ways to manage your super in retirement. If you'd like to discuss your retirement plans or if you have any other financial advice queries contact us on 1300 033 166 or fill in our online contact form. There’s no additional charge for our phone based service as this is included in your TelstraSuper membership.
Online contact form