Boylan & Dodd Lump-Sum Payments




A lump sum payment made by an employer on retirement or removal from office attract special tax treatment.
The lump sum you receive is reduced for the purposes of calculating income tax as follows:

- From 1 Dec 1998 To 31 Nov 1998
Basic exemption €10,158 (£8,000) + €762 (£600) per year of service £6,000 + £500 per year of service


The basic exemption may be increased by differing amounts subject to the maximum exemption of €10,158 + €762 per year of service (from 1/12/1998) OR the SCSB*, which ever is greater.
* SCSB - Standard Capital Superannuation Benefit (Phew!)
The SCSB is calculated as follows:-

From the following mathematical calculation, deduct any tax free lump sums received from a revenue approved pension scheme:-
average yearly pay for last three
years to termination 		x no of completed years of service
__________________________________
15


Notes
Statutory Redundancy Payments are tax free.
Payments on account of injury are tax free. Disability Benefit, is, however, taxable.
Lump sum payments from a revenue approved superannuation scheme are tax free.