Lump Sum / Redundancy Tax
Tax on a redundancy or termination lump sum.
NZ$
NZ$
Net lump sum
$20,100.00
Tax on lump sum: $9,900.00
| Lump sum | $30,000.00 |
|---|---|
| PAYE | −$9,900.00 |
| Net amount | $20,100.00 |
ACC earner levy (1.60%) also applies — not modelled here. Add ~$480 on a $30k lump sum.
About this calculator
A redundancy lump sum is taxed as an extra-pay using the same IR340 method as bonuses. There is no tax-free portion in NZ as of 2011 (the previous $60,000 exemption was removed).
- Compute PAYE on (annual salary + lump sum) and subtract PAYE on annual salary alone.
- ACC earner levy applies up to the cap.
- Holiday pay paid with the redundancy is taxed the same way.
Frequently asked questions
Is any redundancy tax-free?
No. The previous $60,000 redundancy tax exemption was repealed effective 1 October 2011.
Should I time my redundancy?
If you're between jobs across two tax years, splitting the income across years can reduce total tax. Talk to an accountant for material amounts.
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Calculator NZ provides general information only. For decisions with significant financial, medical or legal consequence please consult a qualified professional.