ETP Tab

Not available in Accountants Office

The ETP tab contains the concessional rates of tax that will be applied to the Employment Termination Payment in order to calculate any ETP offset available to the taxpayer.

Lump sum B Component: This is the percentage that is applied to the Lump sum B amount included in assessable income and taxed at marginal rates, with an offset to ensure that tax payable is limited to 30%.

Taxable Component: Is that part of the payment that is taxable as detailed on the ETP Payment Summary.

Under 55 up to cap: This is the rate of tax to be applied to the taxable component for a taxpayer who has not reached the preservation age at 30 June to ensure that it is kept to a maximum rate of tax of 30%

55 years and over up to the cap: This is the rate of tax to be applied to the taxable component for a taxpayer who has reached the preservation age at 30 June to ensure that it is kept to a maximum rate of 15%.

All ages over the lower cap: Any amount over the ETP cap is considered excessive and is taxed at the top marginal rate of 45%.

Age 55 Life-time benefit ETP cap: This is the Total Taxable Component the taxpayer may receive in his or her lifetime from an employer. This amount is indexed annually.

Whole of income cap: The whole-of-income cap only applies to some ETPs, for example Golden Handshakes. The whole-of-income cap is $180,000 minus other taxable income earned throughout the income year. The taxable component of an ETP is taxed at either 15% or 30% up to the whole-of-income cap. ETP amounts over the whole-of-income cap are taxed at the top marginal tax rate of 45%.