On 1 July 2019, Tex Milliken, aged 59, retired from his employment as chief accountant of Acme Holdings Limited. He received a golden handshake lump sum of gross $210000, from which $35920 PAYG tax was withheld. This was comprised entirely of a taxable component.

Tex did not derive any other taxable income during the year and did not have any deductions. He has private hospital insurance and did not have any unused leave or salary outstanding upon termination.

Briefly define what an employment termination payment (ETP) is. 

What are the tax rules / rates that would apply to the lump sum payment (you are not required to complete any calculations for this question)

Answer rating: 100% (QA)

An Employment Termination Payment ETP refers to a lump sum payment made to an employee upon the term... View the full answer