Document ID: chunk:federal_register_of_legislation:F2024L00664:clause:11_5:p1
Version: federal_register_of_legislation:F2024L00664
Segment Type: clause
Provision Reference: sch 11 cl 5 (pt 1/4)
Character Range: 220163–224564

5     Uses table A to determine the withholding rate on amounts over the calculated whole-of-income cap of $40,000. As the $21,000 gratuity is under the cap, no further calculation is required.  Nil

MacroBiz withholds $267 from the $834 part of the ETP for genuine redundancy and $6,720 from the $21,000 gratuity part of the ETP. MacroBiz must issue Alec with two separate ETP payment summaries covering each part of the payment.

Note 2: For more information about calculating the tax-free portion of a genuine redundancy payment, refer to Taxation of termination payments.

Table A: Withholding rates for ETPs

Table A: Withholding rates for ETPs
Income component derived by your employee in the income year                             Age of person at the end of the income year that the payment is received  Component subject to PAYG withholding  Rate of withholding                          Cap to apply
Life benefit ETP – taxable component

Payment is because of:

    * early retirement scheme                                                            Under preservation age                                                    Up to the ETP cap amount               32%                                          ETP cap
    * genuine redundancy
    * invalidity
    * compensation for personal injury, unfair dismissal, harassment or discrimination.

Preservation age or over                                                                 Up to the ETP cap amount                                                  17%                                    ETP cap
All ages                                                                                 Amount above the ETP cap amount                                           47%                                    ETP cap

Life benefit ETP – taxable component

Payment is:

    * a 'golden handshake'
    * non-genuine redundancy payment
    * severance pay                                                                      Under preservation age                                                    Up to the relevant cap amount          32%                                          Smallest of ETP cap and whole-of-income cap
    * a gratuity
    * in lieu of notice
    * for unused sick leave
    * for unused rostered days off.

Preservation age or over                                                                 Up to the relevant cap amount                                             17%                                    Smallest of ETP cap and whole-of-income cap
All ages                                                                                 Amount above the relevant cap amount                                      47%                                    Smallest of ETP cap and whole-of-income cap
Death benefit ETP paid to non-dependants – taxable component                             All ages                                                                  Up to the ETP cap amount               32%                                          ETP cap
Amount above the ETP cap amount                                                          47%                                                                       ETP cap
Death benefit ETP paid to dependants – taxable component                                 All ages                                                                  Up to the ETP cap amount               Nil                                          ETP cap
Amount above the ETP cap amount                                                          47%                                                                       ETP cap
Death benefit ETP paid to a trustee of a deceased estate                                 –                                                                         –                                      Nil                                          –

Additional information

The ETP cap amount for the 2024-25 income year is $245,000. The amount is indexed annually.

The whole-of-income cap amount for the 2024-25 income year and future years is $180,000. This amount is not indexed.

A death benefit dependant for taxation purposes includes:
    * spouse of the deceased
    * child of the deceased under 18 years old
    * a person who had an interdependency relationship with the deceased
    * a person who was a dependant of the deceased just before the