Louise has worked for Rocky for 8 years. Unfortunately, due to COVID-19 pandemic, Rocky is forced to make many employees’ redundant and Louise has been selected as part of the redundancy program. Louise is made redundant in the 2021 financial year and receives a payment of $200,000 on top of annual and long service leave entitlements totalling $8,000. Had she not been made redundant and resigned voluntarily, she would have been paid $20,000 under the relevant workplace policies (on top of any annual and long service leave entitlements). Louise will also forego bonus commission she was expected to earn in 2022 financial year. Finally, Louise borrowed money totalling $5,000 totalling $5,000 from Rocky for her latest holiday but Rocky agreed to waive this. Question: Explain Louise’s tax consequences of the above transactions and her taxable income.
Louise has worked for Rocky for 8 years. Unfortunately, due to COVID-19 pandemic, Rocky is forced to make many employees’ redundant and Louise has been selected as part of the redundancy program.
Louise is made redundant in the 2021 financial year and receives a payment of $200,000 on top of annual and long service leave entitlements totalling $8,000. Had she not been made redundant and resigned voluntarily, she would have been paid $20,000 under the relevant workplace policies (on top of any annual and long service leave entitlements). Louise will also forego bonus commission she was expected to earn in 2022 financial year. Finally, Louise borrowed money totalling $5,000
totalling $5,000 from Rocky for her latest holiday but Rocky agreed to waive this.
Question:
Explain Louise’s tax consequences of the above transactions and her taxable income.
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