redundancy

pamos

I have processed a redundency payment classified etp tax free component after reading the ATO for hours in december 2020 and believing this was correct the employee qualified and did not have to pay tax on the payment.

the tax agent for the employee claims it is incorrect and should be lump sum D i changed the redundacy payroll catagorie to lump sum D and done a $0 pay run for 30.6.21

after resending it as a lump sum D the tax agent says it should be a tax free component.

i cant see how i can fix it as the lump sum D does not seem to have a tax free component.  I did not deduct tax from this $25,107.36 payment the tax agent says it should be both lump sum D and tax free component at bottom of certificate (but not etp tax free component) currently it is lump sum D and a etp taxable component

Tracey_H

Hi @pamos 

 

Thanks for your post. When creating payroll categories for ETP payments you would generally create 3, ETP Taxable, ETP Tax Free and ETP Tax Withheld. Did you assign the Lump Sum D ATO reporting category to the ETP Tax Free payroll category? These help articles have detailed information on termination payments:

Creating payroll categories for termination payments 

Recording a final pay

 

Please let me know how you go with this.

 

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