The ATO advises that from 1 July 2012, changes have been made to the way certain types of employment termination payments (ETPs) are taxed. If a taxpayer makes an ETP they need to ensure that they withhold the correct amount from the payment and report this on the PAYG payment summary - employment termination payment form.
The form is to be used if an ETP is made from 1 July 2012 to:
- an employee whose employment has been terminated
- a non-dependant because of an employee's death
- a dependant because of an employee's death if the taxable component of the payment exceeds the ETP cap (the ETP cap is $175,000 for the 2012-13 income year)
- a trustee of a deceased employee's estate.