I’ve just been made redundant

[davidhussy]

Can anybody help me understand what my payout will look like?

Here are the facts:

• I’ve been a full time employee for just under 3 years
• My final working day is the 16th of Feb
• Termination date is 22nd of March
• I’ll receive statutory redundancy of 6 weeks base wage
• A further discretionary redundancy pay of 11 weeks base wage
• payout of my accrued annual leave (41hrs)
• My base is 95,000k p/a or $48.08 p/h

Mostly I would like to know:
- How much tax I would expect to pay on this payment
- Is my long service leave also paid out?
- Would I also be paid for the weeks between the 16th of February and the 22nd of March?

 

[hashleyg]

@davidhussy I think these are questions for the payroll team

 

[davidhussy]

@hashleyg Yes, trying to organise a meeting but it’s a large company and the comms around this have been terrible. Wanted to go in with as much info as possible

 

[rob_aston]

@davidhussy You can just email payroll and they will reply with the math.

 

[zaki]

@rob_aston lol. If you work for a “large” company as OP stated this is laughable. They will likely not get back to you or even close the case. Circle of BS.

 

[thiagan]

@davidhussy Hmm I also work for a large company that recently had redundancies with terrible comms.... Ha

 

[foc777]

@thiagan Careful you don't accidentally dox yourself. That narrows down your company to about 95% of them.

 

[becca17]

@foc777 Don't be "generous" - 98% for sure

 

[anne97]

@hashleyg Yes and when I was made redundant payroll messed up the original estimate by 20K over (because of a change of contract mid way through my tenure which changed my effective start date for discretionary redundancy payout).

The actual final estimate was then also incorrect and didn't meet the statutory redundancy amount and was a few grand under, which luckily I checked.

This was also a large organisation which if I told you who it was you'd be think that shouldn't happen there but also not be surprised that it did...

 

[regalia]

@anne97 My money is on Westpac.

 

[theo2020]

@davidhussy Ok, very quick summary:

No tax on the 6 weeks as that is Lump Sum D and under the tax free cap

The additional 11 weeks is an ex-gratia payment classified as an ETP and unless you are over preservation age and/or have a total earnings in excess of $210k this financial year will be taxed at 32.5%

Annual leave will be taxed at 32.5%

As you are under 5 years service they don’t need to pay out your LSL

Yes, they will pay you until the termination date. You will need to confirm if you bring paid out on 16/2 or 22/3. If the former your notice will be tax free and fall under Lump Sum D, if the latter you will receive your normal pay taxes under regular PAYG rates until then

Your payroll team will have done the calculations and generally supplied them to HR who are to distribute them.

Best of luck

 

[ashira01]

@theo2020 LSL = Long Service Leave ?

Didn't know that gets paid out

 

[linhmaiha]

@ashira01 Some states pay it out on Redundancy terminations after a certain number of years service. The years of service required varies by state.

 

[john3v30]

@ashira01 It only gets paid out after 7 or 8 yrs of employment

 

[droval]

@john3v30 Not true. I've had contracts where it's paid out after 5 if you are made redundant.

 

[davidhussy]

@theo2020 Thank you for this. This is what I believed it would be. However, a few replies seem to state that the 11 weeks are also tax free.

I’ll speak to HR today so I can know exactly figures. These questions were keeping me up last night so I thought I would post

 

[mj1999]

@davidhussy The ex gratia is tax free up to the cap. So if you were getting $24k tax free the gross amount above that will be PAYG’d

 

[theo2020]

@mj1999 Ex-gratia is an ETP and doesn’t fall under the redundancy tax free component and is taxed at 32.5% pending on age and if ETP cap is reached.

Also, forgot to mention, you will only get super on your notice period payment. That is regardless of whether it is paid upfront on the 16/2 or on 22/3

 

[mj1999]

@theo2020 Doesn't the tax-free cap work on all ETPs in the case of a genuine redundancy when you interpret https://www.ato.gov.au/individuals-...job/redundancy-payments#ato-Genuineredundancy ? At least that was how it was structured by payroll/HR when I got my redundancy letter.

 

[driftdee]

@theo2020 This isn’t true - statutory redundancy and any ex gratia are all etp