Question: Mary Bucks, aged 40, was dismissed on 30 June 2019 by Debt Administration Pty Ltd. Her salary and wages for 2018-19 were $65,000, $10,000 for

Mary Bucks, aged 40, was dismissed on 30 June 2019 by Debt Administration Pty Ltd. Her salary and wages for 2018-19 were $65,000, $10,000 for unused annual leave, $13,500 for unused sick leave. Mary has evidence that she was unfairly dismissed because of her strong union affiliation. She hires a lawyer to dispute her termination and he negotiates a $22,000 out-of-court settlement for unfair dismissal.

  1. Prepare an ETP report for Mary’s manager showing the amount of tax withheld from the ETP.

Salary 2018-19

$

Unused Annual Leave

$

Unused Sick leave

$

Compensation for unfair dismissal

$

Whole-of-income cap

$

ETP cap

$

Concessionally taxed amount

$

Tax withheld

$

  1. Explain the proper tax treatment for different components of the payment in part a) by completing the table below:

Components

Tax Rate

ETP code (if applicable)

Salary and wages

Unused annual leave

Unused sick leave

Compensation for unfair dismissal

  1. What information must be made and kept by Little Pear Administration Pty Ltd. Regarding Mary’s employment?

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