Lump sum payments

Basic exemption

The basic exemption is €10,160, plus €765 for each full year you were working for your employer. A termination payment from your employer will be tax free if it does not exceed the basic exemption.

You can count the following towards a full year's work:

  • time worked before and after a career break
  • a period of job-sharing or part-time work
  • for group companies, all work carried out in Ireland.

You cannot count a career break towards a full year’s work.

There is no limit on the number of times you can avail of the basic exemption provided that:

  • you receive the lump sum termination payments from different, unconnected employers
  • and
  • you do not exceed a life-time limit of €200,000.

Next: Increased exemption