If the business needs to downsize or cut costs it will be obliged to pay relevant employees a statutory redundancy payment. The payment is not taxable.
Some employers make an enhanced redundancy payment, also referred to as a contractual redundancy payment. If there is no question that the termination is on grounds of redundancy, then this is payable tax free.
Other elements of the termination package are taxed differently:
The financial package that the employer pays to the employee on termination of employment comprises different elements. It includes, but is not necessarily limited to, the compensation payment. Tax treatment is different for each component of the overall package.:
When are they used? What is in them? Use our guide to understand more about settlement agreements
Depends on a variety of factors. We will advise about the particulars of your situation and explain how much compensation is appropriate
Is a settlement agreement offered when employees are redundant? Find out more on our redundancy pages
We seek to address your legal needs in a way that suits you. For certain matters we can offer a fixed fee arrangement. Learn more about costs with Aeon settlements
Discover more about the terms that the employer will include in the settlement agreement.