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MissCandice 
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Joined: 01 January 2007
Location: Christchurch
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 Topic: Redundancy
Posted: 19 April 2010 at 3:48pm |
Does anyone know what they charge you on redundancy tax? I find out tomorrow if I am being made redundant so I am planning ahead. Sucks though because I love my job 
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~ Mummy to a beautiful girl ~
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caliandjack
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Posted: 19 April 2010 at 4:14pm |
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Not sure what you mean by redundancy tax? Any redundancy you receive will be at your normal tax rate.
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clover
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Posted: 19 April 2010 at 4:19pm |
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You get a rebate of 6 cents in every dollar. So you would take whatever your redundancy payment is and multiply it by 0.06. So if you got $5000 redundancy it would be 0.06 x 5000 = $300. You would get a rebate from IRD of $300.
The forms to apply for the rebate are on the IRD website.
Sorry to hear about this and fingers x that your job is safe!
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MissCandice
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Posted: 19 April 2010 at 4:33pm |
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I got told that your redundancy tax rate it alot higher than the normal rate? But if it is tve same rate that would be awesome.
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~ Mummy to a beautiful girl ~
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clover
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Posted: 19 April 2010 at 4:50pm |
I don't do payroll so this might be wrong but I think what happens is that because the amount you get paid at once would take you over the threashold for your normal tax rate for that pay period the portion over the threashold would be taxed at the higher rate. Then when you do your tax return at the end of the year you would get it back (assuming your earnings don't take you into the next band).
It explains all the tax bands to you here
And don't forget to apply for the rebate as well, 6 cents in every dollar is something!
ETA: Just to fix up the weird order of my link
Edited by summerlamb
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GuestGuest
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Posted: 19 April 2010 at 5:03pm |
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Yep, I agree with summerlamb. They can either do it that way and you get some tax back later or they can work how many weeks the redundancy equates to and override the tax to calculate it correctly for that longer period. You're lucky you get a redundancy payout in your contract, I haven't seen many contracts that allow for that nowadays!
Good luck for tomorrow.
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MissCandice
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Posted: 19 April 2010 at 5:07pm |
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Thanks for your info.
Since we are only just into a new tax year now wouldn't the tax rate be lower than usual?
Sorry haven't looked at the link yet as I am just on my phone.
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~ Mummy to a beautiful girl ~
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clover
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Posted: 19 April 2010 at 5:15pm |
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They calculate your tax rate by 'grossing' up your last 4 weeks pay. I.e they take your last 4 weeks pay, multiply that to give them an annual figure, then add the redundancy payment on top.
Not sure how this will translate but here is the relevant table from the web page:
When the combined total of the lump sum payment and the grossed-up annual value of the employee's income for the previous four weeks* is ... then PAYE applies to the whole lump sum at a flat rate of ...
$14,000 or less 14.5 cents in the dollar.
from $14,001 to $48,000 23 cents in the dollar.
from $48,001 to $70,000 35 cents in the dollar.
greater than $70,000, but less than the ACC earners' levy maximum threshold of $110,018 (for the 2011 tax year) 40 cents in the dollar.
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tiptoes
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Posted: 24 April 2010 at 9:09pm |
When I got made redundant they taxed me as if I'd earn my normal salary + the redundancy amount so it was heaps more but then because I didn't earn over that amount and went and studied instead I got the nice tax refund. But you're right that is a pain since we've just finished the tax year
Hopefully you didn't get made redundant 
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mummyofprinces
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Posted: 24 April 2010 at 9:27pm |
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You can claim that rebate immediately too, your employer should give it to you with final pay slip .. but hopefully you wont need it.
Hmm, wonder if I am due anything else back, i figured the rebate was to cover that...
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Raspberryjam
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Posted: 24 April 2010 at 10:24pm |
I got 0.6 % (i think) back when I took redundancy - bugger all really - but have also been advise to file a return
Adn the threshold befor you can ask for a benefit after redundacny is quite low from memory , so check it out asap - thats if you need it, I hope you wont
Big hugs Hun, I hope you get to stay, your having a bloody rough time 
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MissCandice
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Posted: 24 April 2010 at 10:47pm |
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Well it wasn't good news :( I can't even comment either. Even though it's been in the paper all week
Edited by Kandice
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~ Mummy to a beautiful girl ~
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mummyofprinces
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Posted: 25 April 2010 at 9:45am |
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Hugs hun, it really sucks doesnt it!!!!!!
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M2K
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Posted: 25 April 2010 at 3:24pm |
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Oh no! I hope something else comes up for you real soon, its hard finding decent work down here though.
I was also made redundant last week, but in my case I would've resigned as Im having our 2nd bubs already. But I didn't know to fill out rebate form, thanks ladies.
Wish there were more options for us mums to work from home.
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Redundancy
