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Lump Sum Payments

Lump Sum Payments

Lump sum payments

You may receive a lump sum payment from your employer if you retire or have left work.

You will only be liable to pay tax on the amount of your payment that is more than either:

  1. basic exemption and increased exemption (if due)
  2. Standard Capital Superannuation Benefit (SCSB).

The basic exemption is €10,160, plus €765 for each complete year that you have worked.

The following items can be counted towards a full year’s work:

  1. time worked before and after a career break
  2. a period of job-sharing or part-time work
  3. for group companies, all work carried out in Ireland.

You may also claim an increased exemption up to €10,000. To claim this, you must not have received a lump sum payment in the past ten years.

You may benefit from SCSB if you have high earnings and long service.You calculate SCSB at one fifteenth of the average annual pay for your last 36 months in employment. This is then multiplied by the number of year’s service. Any tax free lump sum payments you receive are then taken from this benefit.

Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie

 

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