Find out more about Redundancy
This is part of a series of articles on Tax and Redundancy. Click here for the first post in this series.
Being let go from a job is not always treated as a redundancy – there are certain legal criteria that must be met before it is deemed a redundancy and be eligible for Redundancy payments.
Are you eligible for a Redundancy payment?
You are eligible for a Redundancy payment on being let go if you meet the following:
- You are over 16 years old
- You have been employed with the company continuously for 104 weeks (2 years)
- You are in insurable employment. Effectively, these are PRSI class A contributions – you can check this on your payslip.
If you do not meet the conditions above, then any and all payments received upon termination of employment will just be treated as an additional salary payment (or bonus) and is taxable as normal under PAYE income tax.
The good news is that if you do meet the conditions above, then you are legally obliged to receive a redundancy payment. This is called a Statutory Redundancy payment. You may also receive additional amounts at the discretion of your employer, some of which may also be received tax free.
Let’s look at the different types of redundancy payments you can receive and we can look at them in more detail in following posts.
What is a Redundancy payment?
Not every payment received on finishing work is a redundancy payment and eligible for additional tax relief. The following are treated as if they were normal salary payments and taxable under income tax without any special treatment or exemptions:
- Salary owed to you and pay in lieu of notice.
- Payments for holidays due to you.
- Value of assets transferred to you – typically a company car
- Bonuses due.
Types of Redundancy payments?
Your redundancy payment can be split into the following types:
- Statutory Redundancy payments
- Redundancy payments exempt from income tax
- Further payments taxable as normal under Income Tax
More About Redundancy
- Introduction to Redundancy and Tax
- Statutory Redundancy
- Other Tax-exempt Redundancy payments (basic exemption, increased exemption, SCSB)
- Top-slicing Relief
Click the links above to find out more about the different areas of redundancy and taxable events.
Contact us
If you need to contact us for a redundancy consultation, you can use our contact form or email refunds@redoaktaxrefunds.ie
