Schedule Sch 11 - Taxation Administration Act Withholding Schedules 2017 - – Tax table for employment termination payments

Schedule 11 – Tax table for employment termination payments

This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by paragraph 12-85(b) of Schedule 1 to the TAA.

You should use this table if you pay an individual an amount that is either:

■ an employment termination payment (ETP)

■ a delayed termination payment – that is, a payment that would be an ETP but was paid more than 12 months after the relevant termination of employment.

■ Delayed termination payments

■ Taxation of termination payments for information about ETPs for employers and employees.

Employment termination payments

An ETP is a lump sum payment you make:

■ to an employee when their employment is terminated (referred to as a 'Life benefit' ETP)

■ to an employee’s estate because their employment has been terminated due to death (referred to as a 'Death benefit' ETP).

ETPs include lump sum payments paid upon resignation, retirement or death. A payment from a super fund is not an ETP.

A payment must generally be made within 12 months of termination to qualify as an ETP. A payment made outside 12 months is a delayed termination payment, unless we have given approval for the payment to be treated as an ETP.

Tax treatment of ETPs

ETPs can comprise of two different components:

■ a tax-free component

■ a taxable component.

You only withhold tax from the taxable component.

Depending on the type of ETP, the concessional tax treatment may be limited to the smaller of:

■ the ETP cap

■ the whole-of-income cap.

The top rate of tax applies to amounts paid in excess of these caps.

The ETP cap amount for the 2017–18 income year is $200,000. This amount is indexed annually.

The whole-of-income cap amount for the 2017–18 income year is $180,000. This amount is not indexed. This cap is reduced by any other taxable income payments your employee receives in the income year – for example, salary or wages you have paid to your employee.

In some cases, you may need to include an ETP in the taxable payments when working out the whole-of-income cap.

The ETP payment summary has an ETP code that you use to describe the type of ETP and which cap has been applied to it.

<table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><tbody><tr><td style="border-top:2.25pt solid #808080; border-right:0.75pt solid #ffffff; border-left:0.75pt solid #ffffff; border-bottom:0.75pt solid #ffffff; padding-right:9.62pt; padding-left:9.62pt; padding-bottom:9.52pt; vertical-align:top; background-color:#99ccff">Example 2: Whole-of-income cap – payment less than capJane is an employee of SmallBiz Pty Ltd and is 50 years old. Jane’s <a href="#Preservationage" style="text-decoration:none">preservation age</a> is 60. Jane resigns from SmallBiz to start a new business.Up until Jane’s date of resignation, SmallBiz paid Jane salary and wages totalling $84,000. Under her employment contract, Jane will receive a ‘golden handshake’ of $10,000 from SmallBiz. This payment is an ETP and has a tax-free component of $2,000 (relating to service before July 1983) and a taxable component of $8,000. SmallBiz is required to withhold an amount under the PAYG withholding system. Jane had previously provided her TFN to SmallBiz.SmallBiz does not withhold from the tax-free component of $2,000, but must withhold an amount from the taxable component of $8,000.SmallBiz classifies the payment as a ‘golden handshake’. Using table A and the following steps, SmallBiz works out which cap to apply and the withholding rate:<table cellspacing="0" cellpadding="0" style="border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr><td style="border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Step</td><td style="border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">SmallBiz action</td><td style="border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Result</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">1</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Adds up all taxable payments (excluding the ETP) paid to Jane.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">$84,000</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">2</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Subtracts the step 1 amount from $180,000. This is the calculated whole-of-income cap.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">$96,000</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">3</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Determines the smallest cap by comparing result from step 2 against ETP cap amount of $200,000.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Whole-of-income cap is smallest</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">4</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Uses table A to determine withholding rate on amounts up to calculated whole-of-income cap of $96,000, remembering Jane is under preservation age.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">5</td><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Uses table A to determine withholding rate on amounts above the whole-of-income cap of $96,000. As whole $8,000 ETP is under cap, no further calculation is required.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Nil</td></tr></tbody></table>SmallBiz withholds $2,560 from Jane’s ETP of $10,000. This is 32% of Jane’s taxable component of $8,000.</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><tbody><tr><td style="border-top:2.25pt solid #808080; border-right:0.75pt solid #ffffff; border-left:0.75pt solid #ffffff; border-bottom:0.75pt solid #ffffff; padding-right:9.62pt; padding-left:9.62pt; padding-bottom:9.52pt; vertical-align:top; background-color:#99ccff">Example 3: Whole-of-income cap – payment greater than capChris is younger than his <a href="#Preservationage" style="text-decoration:none">preservation age</a>. He has his employment terminated by MediumBiz in January. His employment termination does not meet the criteria of a genuine redundancy.MediumBiz paid Chris $50,000 in leave entitlements as a lump sum and $50,000 in salary and wages before his termination. In addition to this income, Chris is also paid $130,000 as an ETP comprising of a $100,000 taxable component and has a tax free component of $30,000 (relating to service before July 1983).As the ETP is not a genuine redundancy, MediumBiz classifies the payment as a ‘golden handshake’. Using table A and the following steps, MediumBiz works out which cap to apply and the withholding rate:<table cellspacing="0" cellpadding="0" style="border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr><td style="border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Step</td><td style="border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">MediumBiz action</td><td style="border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Result</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">1</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Adds up all taxable payments (excluding the ETP) paid to Chris.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">$100,000</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">2</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Subtracts the step 1 amount from $180,000. This is the calculated whole-of-income cap.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">$80,000</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">3</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Determines smallest cap by comparing result from step 2 against ETP cap amount of $200,000.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Whole-of- income cap is smallest</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">4</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Uses table A to determine withholding rate on amounts up to calculated whole-of-income cap of $80,000, remembering Chris is under preservation age.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">5</td><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Uses table A to determine withholding rate on amounts over the calculated whole-of-income cap of $80,000. An ETP of $100,000 less the cap amount $80,000 gives $20,000 over the cap.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">47%</td></tr></tbody></table>MediumBiz withholds $35,400 from Chris’s ETP of $130,000. This is $25,600 ($80,000 x 32%) plus $9,400 ($20,000 x 47%) of Chris’s taxable component of $100,000.</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="border-collapse:collapse"><tbody><tr><td style="border-top:2.25pt solid #808080; border-right:0.75pt solid #ffffff; border-left:0.75pt solid #ffffff; border-bottom:0.75pt solid #ffffff; padding-right:9.62pt; padding-left:9.62pt; padding-bottom:9.52pt; vertical-align:top; background-color:#99ccff">Example 4: ETP subject to both ETP cap and whole-of-income capAlec, 30, is made redundant by MacroBiz after 5 years of service and receives a termination payment of $65,678 that is part genuine redundancy ($40,678) and part gratuity ($25,000). Until his redundancy, Alec had received $140,000 in salary and wages for the income year.In this situation the part of the payment that is subject to the ETP cap only is always dealt with first.Alec’s employer calculates the genuine redundancy amount over the tax-free limit<a href="#example_4_footnote" style="text-decoration:none">*</a> as $5,133. This is calculated as follows:$40,678 less $35,545 due to the 5 years of service [$10,155 base limit plus $25,390 (5 x $5,078)]. The amount of $5,133 is an ETP.Using table A, his employer works out that only the ETP cap applies. Alec is under <a href="#Preservationage" style="text-decoration:none">preservation age</a>, so MacroBiz withholds $1,643 (32% of $5,133).Using table A and the following steps, MacroBiz then works out which cap to apply and the withholding rate on Alec's $25,000 gratuity part of the ETP.<table cellspacing="0" cellpadding="0" style="border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr><td style="border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Step</td><td style="border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">MacroBiz action</td><td style="border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Result</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">1</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Adds up all taxable payments, salary and wages paid to Alec.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">$140,000</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">2</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Subtracts the step 1 amount from $180,000. This is the calculated whole-of-income cap.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">$40,000</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">3</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Determines smallest cap by comparing result from step 2 against ETP cap of $189,103 (ETP cap $200,000 for 2017–18 less the $5,133 ETP).</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Whole-of-income cap is smallest</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">4</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Uses table A to determine withholding rate on amounts up to calculated whole-of-income cap of $40,000 remembering Alec is under preservation age.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">5</td><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Uses table A to determine withholding rate on amounts over the calculated whole-of-income cap of $40,000. As the $25,000 gratuity is under the cap, no further calculation is required.</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Nil</td></tr></tbody></table>MacroBiz withholds $1,643 from the $5,133 part of the ETP for genuine redundancy and $8,000 from the $25,000 gratuity part of the ETP. MacroBiz must issue Alec with two separate ETP payment summaries covering each part of the payment.<a id="example_4_footnote"></a>* For more information about calculating the tax-free portion of a genuine redundancy payment, refer to <a href="https://www.ato.gov.au/Business/Your-workers/In-detail/Taxation-of-termination-payments/" style="text-decoration:none">Taxation of termination payments</a>.</td></tr><tr><td style="border:0.75pt solid #ffffff; padding-right:9.62pt; padding-left:9.62pt; padding-bottom:9.52pt; vertical-align:top; background-color:#99ccff"></td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr><td style="border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Income component derived by your employee in the income year</td><td style="border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Age of person at the end of the income year that the payment is received</td><td style="border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Component subject to PAYG withholding</td><td style="border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Rate of withholding</td><td style="border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Cap to apply</td></tr><tr><td rowspan="3" style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Life benefit ETP – taxable componentPayment is because of:■ early retirement scheme■ genuine redundancy■ invalidity■ compensation for personal injury, unfair dismissal, harassment or discrimination.</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Under preservation age</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Up to the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Preservation age or over</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Up to the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">17%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">All ages</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Amount above the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">47%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td rowspan="3" style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Life benefit ETP – taxable componentPayment is:■ a ‘golden handshake’■ non-genuine redundancy payment■ severance pay■ a gratuity■ in lieu of notice■ for unused sick leave■ for unused rostered days off.</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Under preservation age</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Up to the relevant cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Smallest of ETP cap and whole-of-income cap</td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Preservation age or over</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Up to the relevant cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">17%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Smallest of ETP cap and whole-of-income cap</td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">All ages</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Amount above the relevant cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">47%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Smallest of ETP cap and whole-of-income cap</td></tr><tr><td rowspan="2" style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Death benefit ETP paid to non-dependants – taxable component</td><td rowspan="2" style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">All ages</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Up to the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Amount above the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">47%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td rowspan="2" style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Death benefit ETP paid to dependants – taxable component</td><td rowspan="2" style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">All ages</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Up to the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Nil</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Amount above the ETP cap amount</td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">47%</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">ETP cap</td></tr><tr><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Death benefit ETP paid to a trustee of a deceased estate</td><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"></td><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"></td><td style="border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Nil</td><td style="border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"></td></tr></tbody></table> ```

Column 1ETP cap only applies to:	Column 2Smaller of the ETP cap or whole-of-income cap applies to:
a payment made under an early retirement scheme that exceeds the tax-free limit* (only the amount in excess of the limit is an ETP)	a ‘golden handshake’ whether paid under:contractindustrial award obligationrecognition of prior service
a genuine redundancy payment that exceeds the tax-free base limit and for each complete year of service limit* (only the amount in excess of the limit is an ETP)	a non-genuine redundancy payment
a payment made because of the employee’s permanent disability	severance pay
compensation payment for personal injury	a gratuity
compensation for unfair dismissal	a payment in lieu of notice
compensation for harassment	a payment for unused sick leave
compensation for discrimination	a payment for unused rostered days off
lump sum payments paid on the death of an employee.	an ETP not covered in column 1.

Step	Action
1	Add up all taxable payments you made to your employee (excluding the ETP).
2	Subtract the step 1 result amount from $180,000.
3	The result from step 2 is the calculated whole-of-income cap.
4	Compare the calculated whole-of-income cap from step 3 and the ETP cap amount of $200,000 for 2017-18 (or the balance of ETP cap if a payment component has already applied to the ETP cap where there have been multiple payments for the same termination).
5	If both caps are equal, use the whole-of-income cap. The smaller of the two caps at step 4 is the cap to apply to the ETP taxable component.

Date of birth	Preservation age
Before 1/7/1960	55
1/7/1960–30/6/1961	56
1/7/1961–30/6/1962	57
1/7/1962–30/6/1963	58
1/7/1963–30/6/1964	59
After 30/6/1964	60

Code	Description
R	ETP because of:■ early retirement scheme■ genuine redundancy■ invalidity■ compensation for:- personal injury- unfair dismissal- harassment- discrimination
O	Other ETP not described by R, for example, golden handshake, gratuity, payment in lieu of notice, payment for unused sick leave, payment for unused rostered days off.

Code	Description
S	This is a code R payment. You made one of the following payments to your employee in a previous income year for the same termination:■ a code R payment■ a code O payment■ a transitional termination payment
P	This is a code O payment and you made one of the following payments to your employee in a previous income year for the same termination:■ a code R payment■ a code O payment■ a transitional termination payment.

Sch 11– Tax table for employment termination payments

Get a plain-English read of Sch 11

d. Code	e. Description
D	Death benefit ETP paid to a dependant of the deceased
B	Death benefit ETP paid to a non-dependant of the deceased. You made a termination payment to the non-dependant in a previous income year for the same termination
N	Death benefit ETP paid to a non-dependant of the deceased
T	Death benefit ETP paid to a trustee of the deceased estate.