Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Taxation of Ex gratia redundancy

  • 25-09-2018 2:39pm
    #1
    Registered Users, Registered Users 2 Posts: 589 ✭✭✭


    Hi


    If your employer was to pay the following can they be "lumped" together as all ex gratia and taxed as such



    Pay in lieu of notice (4 months)
    2018 Bonus
    Statutory Redundancy
    Ex gratia at x weeks per year of service


    Is it possible to collapse all the above payments into the ex gratia amount?


    Thanks in advance


Comments

  • Registered Users, Registered Users 2 Posts: 236 ✭✭adrianw


    jjmcclure wrote: »
    Hi


    If your employer was to pay the following can they be "lumped" together as all ex gratia and taxed as such



    Pay in lieu of notice (4 months)
    2018 Bonus
    Statutory Redundancy
    Ex gratia at x weeks per year of service


    Is it possible to collapse all the above payments into the ex gratia amount?


    Thanks in advance

    Unfortunately not.

    1. 2018 bonus - taxable as normal;
    2. Pay in lieu of notice - contractually obliged - so taxable as normal


  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭jjmcclure


    However couldn't the employer decide to pay MIN bonus instead of MAX bonus and then add the difference between min and max to the ex gratia?


  • Registered Users, Registered Users 2 Posts: 236 ✭✭adrianw


    jjmcclure wrote: »
    However couldn't the employer decide to pay MIN bonus instead of MAX bonus and then add the difference between min and max to the ex gratia?

    Depends on the termination agreement.

    Ex-gratia - rough Latin translation means without obligation.

    Therefore if you are reducing an obligatory payment (bonus) in favor of increasing a non obligatory payment, it is not really an ex-gratia payment.

    It’s the same as suggesting - you employer reduces your salary in exchange for giving you an increased once off Annual gift.

    So personally I would be reluctant to pursue this approach.


  • Registered Users, Registered Users 2 Posts: 34 Watergirl4


    Statutory redundancy isn't taxable so you won't need to lump that in with everything else.

    Pay in lieu of notice is only taxable if contractually obliged so check the wording of your contract...if not contractually obliged then it could form part of ex gratia payment

    https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/index.aspx


  • Registered Users, Registered Users 2 Posts: 3,527 ✭✭✭Masala


    Statutory redundant means job and position is gone.

    If someone else hired to replace you... then I would expect it to become taxable


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 589 ✭✭✭jjmcclure


    Thanks for the replies.


    I think the bonus piece is up for debate e.g. if the company communicated that they did not expect to pay bonus but they are enhancing the ex gratia.


    I am aware this could be challenged by Revenue and they would look at recent custom and practice. However if the company is "under performing" this year it could easily be argued bonus is not due.


Advertisement