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Taxation Administration Act Withholding Schedules No.2 2020
Sch 11– Tax table for employment termination payments
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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 schedule 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.
If you employ individuals under a working holiday makers visa, you must use the Tax table for working holiday makers for all payments made to them, including employment termination payments.
■ Taxation of termination payments for information about ETPs for employers and employees.
■ Delayed termination payments
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 of 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 have 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 2020–21 income year is $215,000. This amount is indexed annually.
The whole-of-income cap amount for the 2020–21 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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif; font-weight:bold">Example 2: Whole-of-income cap – payment less than cap</span></p><p style="margin-top:10pt"><span style="font-family:Arial, sans-serif; font-size:11pt">Jane is an employee of SmallBiz Pty Ltd and is 50</span><span style="font-family:Arial, sans-serif; font-size:11pt"> </span><span style="font-family:Arial, sans-serif; font-size:11pt">years old. Jane’s </span><span style="font-family:Arial, sans-serif">preservation age</span><span style="font-family:Arial, sans-serif; font-size:11pt"> is 60. Jane resigns from SmallBiz to start a new business.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">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.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">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.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">SmallBiz classifies the payment as a ‘golden handshake’. </span><span style="font-family:Arial, sans-serif">Using table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A</span><span style="font-family:Arial, sans-serif"> and the following steps, SmallBiz works out which cap to apply and the withholding rate:</span></p><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"><p style="margin-top:10pt; text-align:center; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Step</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">SmallBiz action</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Result</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">1</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Adds up all taxable payments (excluding the ETP) paid to Jane.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">$84,000</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">2</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Subtracts the step</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">1 amount from $180,000. This is the calculated whole-of-income cap.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">$96,000</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">3</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Determines the smallest cap by comparing the result from step</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">2 against the ETP cap amount of $215,000.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">Whole-of-income cap is smallest</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">4</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Uses table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A to determine the withholding rate on amounts up to the calculated whole-of-income cap of $96,000, remembering Jane is under preservation age.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">32%</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">5</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Uses table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A to determine the withholding rate on amounts above the whole-of-income cap of $96,000. As the whole $8,000 ETP is under cap, no further calculation is required.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">Nil</span></p></td></tr></tbody></table><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">SmallBiz withholds $2,560 from Jane’s ETP of $10,000. This is 32% of Jane’s taxable component of $8,000.</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif; font-weight:bold">Example 3: Whole-of-income cap – payment greater than cap</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Chris is younger than his </span><span style="font-family:Arial, sans-serif">preservation age</span><span style="font-family:Arial, sans-serif">. He has his employment terminated by MediumBiz in January. His employment termination does not meet the criteria of a genuine redundancy.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">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).</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">As the ETP is not a genuine redundancy, MediumBiz classifies the payment as a ‘golden handshake’. Using </span><span style="font-family:Arial, sans-serif">table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A</span><span style="font-family:Arial, sans-serif"> and the following steps, MediumBiz works out which cap to apply and the withholding rate:</span></p><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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Step</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">MediumBiz action</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Result</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">1</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Adds up all taxable payments (excluding the ETP) paid to Chris.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">$100,000</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">2</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Subtracts the step</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">1 amount from $180,000. This is the calculated whole-of-income cap.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">$80,000</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">3</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Determines the smallest cap by comparing the result from step</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">2 against ETP cap amount of $215,000.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">Whole-of- income cap is smallest</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">4</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Uses table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A to determine the withholding rate on amounts up to the calculated whole-of-income cap of $80,000, remembering Chris is under preservation age.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">32%</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">5</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Uses table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A to determine the 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.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">47%</span></p></td></tr></tbody></table><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">MediumBiz withholds $35,000 from Chris’s ETP of $130,000. This is $25,600 ($80,000</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">×</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">32%) plus $9,400 ($20,000</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">×</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">47%) of Chris’s taxable component of $100,000.</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif; font-weight:bold">Example 4: ETP subject to both ETP cap and whole-of-income cap</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Alec, 30, is made redundant by MacroBiz after 5</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">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.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">In this situation, the part of the payment that is subject to the ETP cap only is always dealt with first.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Alec’s employer calculates the genuine redundancy amount over the tax-free limit (see </span><span style="font-family:Arial, sans-serif">Note 2</span><span style="font-family:Arial, sans-serif">) as $2,209. This is calculated as follows:</span></p><p style="margin-top:10pt; margin-left:17.85pt; font-size:11pt"><span style="font-family:Arial, sans-serif">$40,678 less $38,469 due to the 5</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">years of service [$10,989 base limit plus $27,480 (5 × $5,496)]. The amount of $2,209 is an ETP.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Using </span><span style="font-family:Arial, sans-serif">table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A</span><span style="font-family:Arial, sans-serif">, his employer works out that only the ETP cap applies. Alec is under </span><span style="font-family:Arial, sans-serif">preservation age, so</span><span style="font-family:Arial, sans-serif"> MacroBiz withholds $707 (32% of $2,209).</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Using table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A and</span><span style="font-family:Arial, sans-serif"> 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.</span></p><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"><p style="margin-top:10pt; text-align:center; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Step</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">MacroBiz action</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Result</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">1</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Adds up all taxable payments, salary and wages paid to Alec.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">$140,000</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">2</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Subtracts the step</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">1 amount from $180,000. This is the calculated whole-of-income cap.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">$40,000</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">3</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Determines the smallest cap by comparing the result from step</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">2 against the ETP cap of $212,791 (ETP cap $215,000 for 2020–21 less the $2,209 ETP).</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">Whole-of-income cap is smallest</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">4</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Uses table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A to determine the withholding rate on amounts up to the calculated whole-of-income cap of $40,000 remembering Alec is under preservation age.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">32%</span></p></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"><p style="margin-top:10pt; text-align:center; font-size:11pt"><span style="font-family:Arial, sans-serif">5</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Uses table</span><span style="font-family:Arial, sans-serif"> </span><span style="font-family:Arial, sans-serif">A to determine the 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.</span></p></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"><p style="margin-top:10pt; text-align:right; font-size:11pt"><span style="font-family:Arial, sans-serif">Nil</span></p></td></tr></tbody></table><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">MacroBiz withholds $707 from the $2,209 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.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif; font-weight:bold">Note 2</span><span style="font-family:Arial, sans-serif">: For more information about calculating the tax-free portion of a genuine redundancy payment, refer </span><span style="font-family:Arial, sans-serif">to Taxation of termination payments</span><span style="font-family:Arial, sans-serif">.</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Income component derived by your </span><span style="font-family:Arial, sans-serif; font-weight:bold">employee in the income year</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Age of person at the end of the income year </span><span style="font-family:Arial, sans-serif; font-weight:bold">that the payment is received</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Component subject to </span><span style="font-family:Arial, sans-serif; font-weight:bold">PAYG withholding</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Rate of withholding</span></p></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"><p style="margin-top:10pt; font-size:11pt; background-color:#b2b2b2"><span style="font-family:Arial, sans-serif; font-weight:bold">Cap to apply</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Life benefit ETP – taxable component</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Payment is because of:</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>early retirement scheme</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>genuine redundancy</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>invalidity</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>compensation for personal injury, unfair dismissal, harassment or discrimination.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Under preservation age</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Up to the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">32%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Preservation age or over</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Up to the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">17%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">All ages</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Amount above the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">47%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Life benefit ETP – taxable component</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Payment is:</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>a ‘golden handshake’</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>non-genuine redundancy payment</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>severance pay</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>a gratuity</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>in lieu of notice</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>for unused sick leave</span></p><p class="Bulletedlist1"><span><span style="color:#c0c0c0">■</span></span><span style="font:7pt 'Times New Roman'"> </span><span>for unused rostered days off.</span></p><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Under preservation age</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Up to the relevant cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">32%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Smallest of ETP cap and whole-of-income cap</span></p></td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Preservation age or over</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Up to the relevant cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">17%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Smallest of ETP cap and whole-of-income cap</span></p></td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">All ages</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Amount above the relevant cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">47%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Smallest of ETP cap and whole-of-income cap</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Death benefit ETP paid to non-dependants – taxable component</span></p></td><td rowspan="2" style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">All ages</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Up to the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">32%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Amount above the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">47%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Death benefit ETP paid to dependants – taxable component</span></p></td><td rowspan="2" style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">All ages</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Up to the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Nil</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></td></tr><tr><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Amount above the ETP cap amount</span></p></td><td style="border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">47%</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">ETP cap</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Death benefit ETP paid to a trustee of a deceased estate</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">-</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">-</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">Nil</span></p></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"><p style="margin-top:10pt; font-size:11pt"><span style="font-family:Arial, sans-serif">-</span></p></td></tr></tbody></table> ```