Quick answer
- Statutory redundancy is exempt from Income Tax and USC and is separate from the reliefs for extra termination payments.
- Extra employer redundancy payments are not the same as statutory redundancy and may need relief checks.
- Notice pay, holiday pay and final wages are usually separate from statutory redundancy.
- The basic exemption for a qualifying extra lump sum is €10,160 plus €765 for each complete year of service, but another relief may produce a different tax-free amount.
Redundancy Pay Calculator
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Redundancy tax calculator intent: what users are usually trying to find
Most people searching for a redundancy tax calculator are trying to separate the statutory tax-free amount from the wider final package. A final payment can include several lines, and each line may need different treatment.
| Payment line | Typical tax question | Planning note |
|---|---|---|
| Statutory redundancy | Is this tax-free? | Exempt from Income Tax and USC and ignored when checking relief on an extra termination payment. |
| Enhanced / ex-gratia redundancy | Does a relief or exemption apply? | Check the basic exemption, increased exemption or SCSB where relevant. |
| Payment in lieu of notice | Is it taxable as pay? | A contractual payment is generally taxable in full and does not qualify for the lump-sum exemption. |
| Holiday pay / final wages | Is this normal payroll? | Usually handled as employment pay rather than redundancy. |
Decision tree: what type of payment is it?
Basic exemption: €10,160 plus €765 for each complete year
Revenue’s standard basic exemption for a qualifying termination lump sum is €10,160 plus €765 for each complete year of service. Partial years do not add a proportion of €765.
| Complete years | Basic exemption illustration |
|---|---|
| 5 years | €10,160 + (€765 × 5) = €13,985 |
| 10 years | €10,160 + (€765 × 10) = €17,810 |
| 20 years | €10,160 + (€765 × 20) = €25,460 |
This calculation applies to the qualifying extra termination payment, not to the statutory redundancy amount, which is already exempt.
Increased exemption and SCSB
| Relief | What it considers | Important limitation |
|---|---|---|
| Increased exemption | Can add up to €10,000 to the basic exemption, reduced by certain tax-free pension lump sums. | Conditions apply, including the rule on using the increase within the previous 10 years. |
| SCSB | Uses average annual pay for the final 36 months, complete years of service and relevant pension lump-sum rights. | It is a separate calculation and is not automatically better than the basic or increased exemption. |
Revenue’s general approach is to compare the qualifying reliefs and tax only the part of the relevant extra payment above the applicable tax-free amount. Because pension rights and past termination payments can affect the answer, this guide does not produce a single automatic tax figure.
Why final payslips can be confusing
A final payment can include wages, notice, untaken annual leave, statutory redundancy and an extra employer payment. These are not all treated the same way. That is why a statutory redundancy calculator should not be used as a full final-payslip tax calculator.
What to check before relying on a tax-free figure
- Which part is statutory redundancy.
- Whether there is an enhanced or ex-gratia payment.
- Whether notice pay and holiday pay are included separately.
- Whether Revenue reliefs or limits apply to the extra payment.
Frequently asked questions
Is statutory redundancy tax-free in Ireland?
Statutory redundancy is generally tax-free.
Is an enhanced redundancy payment tax-free?
Not automatically. Extra employer payments need separate checking because exemptions, reliefs or limits may apply.
What is the basic exemption for redundancy?
For a qualifying extra termination lump sum, the basic exemption is €10,160 plus €765 for each complete year of service. Statutory redundancy is already separately exempt.
What is the increased exemption?
Subject to conditions, the increased exemption can add up to €10,000 to the basic exemption, reduced by certain tax-free pension lump sums. It is generally available only once in a 10-year period.
What is SCSB?
Standard Capital Superannuation Benefit is an alternative Revenue calculation based on average annual pay for the final 36 months, complete years of service and relevant pension lump-sum rights.
Is payment in lieu of notice taxable?
If the employment contract provides for payment in lieu of notice, Revenue explains that this part is taxable as pay and the lump-sum exemptions do not apply to it.
Does the redundancy calculator estimate tax on extra payments?
No. It estimates statutory redundancy only. Enhanced redundancy and final-payslip tax should be checked separately.
Sources & references
- Workplace Relations Commission: Annual Leave
- Workplace Relations Commission: Public Holidays
- Workplace Relations Commission: Sunday Premium Entitlement
- Workplace Relations Commission: Working Hours
- Workplace Relations Commission: Redundancy
- Workplace Relations Commission: Minimum Notice
- Citizens Information: Redundancy Payments
- Department of Enterprise: Redundancy
- Department of Social Protection: Redundancy Payment Scheme
- MyWelfare: Official Redundancy Calculator
- Revenue: Lump Sum Payments
- Revenue: Basic Exemption
- Revenue: Increased Exemption
- Revenue: Standard Capital Superannuation Benefit
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