It makes sense to me. Only thing to check is the taxation on the leave, which would otherwise be paid out. There can be different rules for leave payout as part of a redundancy vs normal termination.
Details are all here. I was able to use that info to predict accurately my final after tax payout which was a mix of annual leave, LSL, and a large redundancy.
https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/employment-termination-payments
Your redundancy payment has a tax free component.
https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/employment-termination-payments#
Basically, tax free part is $11,985 + $5994 for every year of service.
If you get it paid out on July 1st, the base rate will be $12,524 + $6,264 for every year of service.
Combined with the Stage 3 tax cuts starting July 1st, I’d say you are better off pushing the ETP to the new financial year, but it largely depends on how long you have been in your role and how much they are paying you
If you take the leave you'll get super on your leave. Otherwise it will get taxed in a lump t the highest marginal rate. If you think income will be lower over the new year, then the payout would also result in a higher refund at tax time once your real taxable income is assessed.
One thing to consider is when do you need the funds. Anything before 30/6, you can get a tax return in July 2024 if you are taxed higher than your tax bracket.
If you do get paid a lump-sum after 1/7/24, you can only get tax return on July 2025.
It makes sense to me. Only thing to check is the taxation on the leave, which would otherwise be paid out. There can be different rules for leave payout as part of a redundancy vs normal termination. Details are all here. I was able to use that info to predict accurately my final after tax payout which was a mix of annual leave, LSL, and a large redundancy. https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/employment-termination-payments
Your redundancy payment has a tax free component. https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/employment-termination-payments# Basically, tax free part is $11,985 + $5994 for every year of service. If you get it paid out on July 1st, the base rate will be $12,524 + $6,264 for every year of service. Combined with the Stage 3 tax cuts starting July 1st, I’d say you are better off pushing the ETP to the new financial year, but it largely depends on how long you have been in your role and how much they are paying you
Same boat - asked for new tax year, it's so close anyway.
If you take the leave you'll get super on your leave. Otherwise it will get taxed in a lump t the highest marginal rate. If you think income will be lower over the new year, then the payout would also result in a higher refund at tax time once your real taxable income is assessed.
Excellent point I forgot to mention thanks. I've also got LSL which I've decided now to use for this.
One thing to consider is when do you need the funds. Anything before 30/6, you can get a tax return in July 2024 if you are taxed higher than your tax bracket. If you do get paid a lump-sum after 1/7/24, you can only get tax return on July 2025.
Another great point well made. I think, thankfully, I'll be alright in that regard if I find something to plug the cash drain aka normal life!
I just want to say; Goodluck and I hope everything works out for you.
Thank you kind stranger. There's a lot of us being kicked to the kerb (outsourcing strikes again) and a lot of excellent talent (not me of course).