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ARTICLE · 14 AUGUST 2014

Snapshots: Tax on employment cases

Holding Redlich
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Two decisions highlight the need to consider the intricacies of tax law for payments made to employees or ex-employees.

AustraliaTax
Stephen Trew
Stephen Trew
Matthew Orr
Matthew Orr
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Two decisions highlight the need to consider the intricacies of tax law when it comes to payments made to employees or former employees. The first decision concerns capital payments for general damages and the second decision concerns the application of compulsory superannuation to contractors.

Case 1: General damages

In Public Servant v Federal Commissioner of Taxation [2014] ITAA 247 the Administrative Appeals Tribunal was required to review an objection to a private ruling on whether a payment made to a former Public Servant, under the terms of a Deed of Release which expressly provided that it represented general damages, was income or capital. This was important because if it was income it would be subject to tax being withheld as an employment termination payment.

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