Tax on Cash Lump Sum
By Marc Sevitz · Updated
I have resigned and Agreed with my current employer to get paid my 3 month notice pay since I am starting my own business. How much tax is applied to a cash lump sum (3month notice 220k leave pay 70k), can I apply for a tax directive.
Your employer can apply for a directive if the extra money was as a result of you being retrenched. If it is a resignation then you will be taxed according to the normal tax tables.
thanks for the prompt response, its a normal resignation unfortunately. can you also advise war rate would apply
It depends on the rest of you income, make use of our SARS income tax calculator to see what the tax will be - enter the before extra amount and after extra amount and the tax will be the difference.