If you have been made redundant, or face redundancy, with a bit of luck you should recieve a lump sum payment.

The way the tax system works, your lump sum could be taxed in the same way your salary/wages are taxed.

What this means is you would be paying tax on this at the higher rate of 41% as the lump sum would probably push you into the higher rate of tax.

However, you should only be paying tax at the same rate you would normally pay on your salary/wages.

What revenue allow you to use the average rate of tax you have paid over the last 3 years before redundancy to use as the rate of tax your employer should apply to your lump sum. This is called top slicing relief.

 

I provide a service to calculate the correct amount of tax you should be charged and will apply to the Revenue Commissioners on your behalf for a tax refund.

Contact me today at jason@mcdowellaccountants.ie or 071 91 63400 for more informaiton.