RETRENCHMENT TAX AND PACKAGES QUESTION URGENT!!! PLEASE HELP!!!

[gravity]

Hi I have a question about retrenchment packages.
I will be getting retrenched soon and I have worked for 5 years for the company.
This is my first time being retrenched and I understand that the first R30,000.00 is exempt from Tax if it is the first retrenchment package.
My question is, will I be exempt from the first R30,000.00 tax deduction - if I was previously terminated (not retrenched) from my previous job where the employer decided after the probation period not to permanently employ me?
I did not receive a retrenchment package from my previous company, I received my normal salary for the month and then my employment was terminated.

 

[Jozsef Borbely]

Hi Gravity,

Its not R30,000 anymore its R500,000. But theres a catch.

As from the 1 March 2011, employer provided severance payments for reasons of age, ill health and retrenchment are aligned with the taxation of lump sum benefits, including the R500,000 tax free limit. In the case of retrenchment the concession does not apply where that person at any time held an interest of more than 5% in that entity. The R500,000 (2015) is a lifetime limit.

Which means that it effects your tax free lump sum retirement benefit. Keep this in mind.

I did not receive a retrenchment package from my previous company, I received my normal salary for the month and then my employment was terminated.

If your received it as a normal salary then you would have been taxed as if it was a normal salary and thus it would not have consumed the R500,000.

You can see the full tax table in the Budget Pocket Guide 2014 that you can download form the link below.

http://www.financespotlight.co.za/downloads/