Question

Calculate the withholding amount. In context of Australia . Please complete the step 7,8 any correction in between.

redundancy pay – $48,200.00
unused sick leave – $3,250.80
payment in lieu of notice – $936.72
unused annual leave – $1,250.96
unused long service leave – $12,725.63
gratuity – $15,000.00
for seven years is made redundant
salary - $72,000
Calculation:

Step 1 :
The redundancy payment and unused sick leave qualifies as genuine redundancy = $48,200.00 + $3,250.80
= $51,450.80

Step 2:
The tax free limit on the genuine redundancy payment= $10,155.00 + (7 X 5,078.00)
= $45,701.00

Step 3 :
The taxable component from genuine redundancy part of payment = $51,450.80 - $45,701.00
= $5,749.80 will be taxed at 32%

Step 4:
Calculating the remaining ETP cap = $200,000.00 - $5,749.80
= $194,250.20

Step 5:
Calculating of non excluded payment - which is in lieu of notice and gratuity
= $936.70 + $15,000.00
= $15,936.70

Step 6: ( as per 2017-18-whole of income cap - $180,000.00)
Calculating of whole of income cap - (total income and annual leave and long service leave)
=180,000 -$72,000 - 1,250.96 - 12,725.63
= $94,023.41

Step 7:
Determine the lesser of the ETP cap (from step 4 and step 6)

Step 8:
Calculated whole of income to the non- excluded payment

Answer 1

Ans. Step 7:
Lesser of the ETP cap = $94,023.41

Step 8:
Whole of income to the non- excluded payment = $15,936.70