Glossary · PAYE and payroll
Termination payment
A lump sum when a job ends, partly tax-free under set exemptions.
Statutory redundancy (the minimum set by law) is tax-free. Other lump sums your employer chooses to pay (ex gratia payments) can be partly tax-free. The tax-free part is the highest of the basic exemption, the increased exemption or the Standard Capital Superannuation Benefit. The rest is taxed as pay.
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All terms · General information, not tax advice.