Retrenchment package on 1 500 000.Final amount

[Mimen]

Ok, I have scoured the web about the tax on a retrenchment package. I found out the first 500 000 is tax free and there is a difference between involuntary and voluntary retrenchment packages. What I cannot find it the percentage of tax I would pay, it will obviously work on a sliding scale.

My retrenchment would be involuntary and my package would be R 1.5 million.

Would there be a BA on here or someone who has worked out the tax before on the scenario above?

Thanks peeps!

 

[Mrlepen]

Damn nice package you got R1 500 000 nice man

 

[SauRoNZA]

I would imagine you simply pay tax as per usual based on the entire income for the year as you normally would.

Which in this case would of course be the highest bracket.

 

[Aghori]

At quick glance you should end up with around 980 000 nett. Give or take a few k.

 

[SauRoNZA]

Wow! Only took one Google.

Tax and Retrenchment

So R500,000 is tax free.

R1,000,000 is taxed so...

Under 65 : Take home pay: R685394
Over 65 : R693188

Total : R 1,185,394

This of course ignores any other salary you've received in the same year but doubtful it will change the bracket at all so shouldn't matter much.

Also ignored pension rebate and medical aid etc.

You can fiddle with the numbers here...

Free SARS Income Tax Calculator 2023 | TaxTim SA

Use our employee's tax calculator to work out how much PAYE and UIF tax you will pay SARS this year, along with your taxable income and tax rates.

www.taxtim.com

 

[Aghori]

Forgot about the first 500k tax free so yup, Sauron is correct.