Statutory Redundancy and Termination Lump Sum Payments

Set up and process statutory redundancy and termination lump sum payments for employees in Ireland.

The element is configured as nonrecurring direct payment and supports payroll processing. It calculates redundancy payments using the statutory formula and validates employee eligibility before processing. The calculated statutory redundancy payment is displayed in the Direct Payments section of the payslip and the Statement of Earnings. The payment is recorded in the Statutory Redundancy and Direct Payments balances.

It generates validation warnings when minimum age, continuous employment, PRSI class, or calculated payment conditions are not met.

To set up statutory redundancy payment, you need to:

1. Create the employee termination.
2. Add the Statutory Redundancy payroll element.
3. Enter:
   • Redundancy Date
   • Average Periodic Amount
   • Payroll Frequency
   • Years of Service
   • Weeks to Pay (optional)
4. Process payroll.
5. Review the payment on the payslip.
6. Verify the Statutory Redundancy balance.

Termination Lump Sum Payments

Termination lump sum payments are separate from statutory redundancy payments. Set them up using a nonrecurring payroll element classified as Standard Earnings or Supplemental Earnings.

For the one-time element setup:

1. Create the nonrecurring element and its element eligibility.
2. End date these balance feeds:
   • Attachable Pay
   • Pay for Employer PRSI
   • Pay for Employee PRSI
   • Lump Sum Pay for PRSI Class M
   • USC Pay
   • Gross Taxable Pay
3. Add the element feed to the Termination Lump Sum balance.

Enter termination lump sum calculation information in the Termination Lump Sum calculation information component under PAYE.

Termination Lump Sum Calculation Information

Field	Required
Years of Service	Yes
Increased Exemption Eligible	Yes
Tax Free Pension Lump Sum	Yes
Tax Free Termination Payments Lifetime	Yes
Average Annual Pay over 36 Months	Yes
Exemption Type, Basic Exemption, Increased Exemption, Taxable Lump Sum Override, and Nontaxable Lump Sum Override	No

The calculation selects the most beneficial Basic, Increased, or SCSB exemption. The default lifetime nontaxable limit is 200,000 EUR and the calculation considers prior termination lump sums when determining the remaining tax-free entitlement.

Include the nontaxable and taxable lump sum amounts in the next payroll submission after the payment date, using Data Items 48 and 49. The taxable amount is liable for USC and isn't reckonable for PRSI. PRSI Class M processing is supported.