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Question: Redundancy Payment - Tax and PENP advice
theredindian
Posts: 5
Forumite
Hi,
I have been offered voluntary redundancy from my employer. I have received an estimate which contains the gross amount only. Whilst I agree with the gross figure, I am trying to work out the tax deductions and PENP on the amount etc. Unfortunately, the employer is not offering PILON.
If the package was £110k, I am aware the first £30k is tax free. Therefore, tax and national insurance would be deducted from the £80k.
If I am earning £5k per month and only wish to work 1 of the 3 months notice period, I am assuming that the PENP would be £10k. Is this entire amount deducted from the £80k? Therefore, the tax and national insurance would be deducted from the remaining balance of £70k?
Also, I am assuming that the salary earned throughout the financial year is taken into account and therefore I could be facing a bigger tax reduction on the £70k?
Any advice would be greatly appreciated.
Thanks in advance,
I have been offered voluntary redundancy from my employer. I have received an estimate which contains the gross amount only. Whilst I agree with the gross figure, I am trying to work out the tax deductions and PENP on the amount etc. Unfortunately, the employer is not offering PILON.
If the package was £110k, I am aware the first £30k is tax free. Therefore, tax and national insurance would be deducted from the £80k.
If I am earning £5k per month and only wish to work 1 of the 3 months notice period, I am assuming that the PENP would be £10k. Is this entire amount deducted from the £80k? Therefore, the tax and national insurance would be deducted from the remaining balance of £70k?
Also, I am assuming that the salary earned throughout the financial year is taken into account and therefore I could be facing a bigger tax reduction on the £70k?
Any advice would be greatly appreciated.
Thanks in advance,
0
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