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LUMPSUM PAYMENTS ARISING FROM DISMISSAL OR SUSPENSION
A thread
http://thetaxplatform.tax/2020/10/31/lumpsum-payments-arising-from-dismissal-or-suspension/
A thread
http://thetaxplatform.tax/2020/10/31/lumpsum-payments-arising-from-dismissal-or-suspension/
- Employment income includes compensation or lumpsum payments made to former or reinstated employees where there were disputes between the parties.
- A former employee of a company is an employee of that company for income tax purposes when receiving compensation payment from them.
- Employers or former employers therefore have to deduct tax from any payment they make to such kind of employees whether it was as a result of negotiations between the parties or an instruction of the court.
- No law or agreement can purport to exempt remuneration received as compensation from employer from tax
- Tax on such remuneration should be deducted at the personal tax rates as provided for in the Eighth Schedule
- Tax on such remuneration should be deducted at the personal tax rates as provided for in the Eighth Schedule
- A former employer shall issue a tax certificate after deducting tax from the former employee
- Where employer doesn’t deduct tax from such employee, they will be liable to pay such tax and any penalty or interest resulting from such failure to pay the tax
- Where employer doesn’t deduct tax from such employee, they will be liable to pay such tax and any penalty or interest resulting from such failure to pay the tax
This thread can be read here: http://thetaxplatform.tax/2020/10/31/lumpsum-payments-arising-from-dismissal-or-suspension/
