Deductions from Redundancy Payments

HolidayGirl

Hi there, My husband has accepted a VR package from his firm. His gross payment is in the region of £50K, we know the first £30K is tax free and the remaining £20K taxable but can someone tell me if he will also have NI and pension contributions deducted from the £20K?

Cheers

jazzyman01

You will likely have NI deductions but it will depend on the contract regarding pension deductions.

getmore4less

No NI on redunancy payments only TAX at the marginal rate over the £30k.

http://www.hmrc.gov.uk/individuals/redundancy-ee.htm


Pension should not be deducted from redundancy but it may be benificial to add to the pension to get the tax releif.


If some of the payment is not redunadncy but for example PILON then that is treated differently.

HolidayGirl

Many thanks for your responses, the fewer deductions the better!!

:j