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Where Taxpayers and Advisers Meet

PILON Tax Treatment

KartRacer
Posts:8
Joined:Sun Dec 18, 2011 12:28 pm
PILON Tax Treatment

Postby KartRacer » Fri Jan 06, 2017 11:42 am

I understand that PILON can be treated as tax exempt depending upon contract wording. Where an employment contract states "either party may request that all or part of the notice period may be waived by mutual agreement which will entitle the company to pay any notice entitlement to you in lieu of having to to work such notice. Where this is mutually agreed, your salary and benefit entitlement, and your employment, will terminate on the agreed date"

Does a contract with such wording constitute a ground for payment on a tax exempt basis.

Thank you in advance, always found this forum very helpful

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: PILON Tax Treatment

Postby SteLacca » Fri Jan 06, 2017 5:08 pm

No. PILON is always taxable. It's redundancy where the treatment is dependent upon the contract.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: PILON Tax Treatment

Postby bd6759 » Fri Jan 06, 2017 6:05 pm

PILON is not always taxable, but in this case, where you have a right to it instead of working your notice, it will be.


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