Redundancy in Ireland: How Much of Your Payout Is Actually Tax-Free?
You've just been told you're being made redundant. Alongside the shock is a very practical question: how much of the payout do you actually keep? A meaningful chunk is tax-free by law — but almost nobody gets the full exemption automatically.
Statutory redundancy — always tax-free
The statutory piece (two weeks' pay per year of service plus a bonus week, capped at €600/week) is entirely tax-free. That's the floor.
Basic Exemption
On top of the statutory piece, you get a Basic Exemption of €10,160 plus €765 for every complete year of service. So 8 years' service = €10,160 + (8 × €765) = €16,280 tax-free.
Increased Exemption
If you haven't used the Increased Exemption in the last 10 years and you're not getting a tax-free lump sum from your pension, you can add another €10,000 — bringing the tax-free ceiling to €26,280 in the example above.
SCSB — often the biggest win
The Standard Capital Superannuation Benefit (SCSB) is usually the largest number. It's roughly: (average annual salary of last 3 years × years of service ÷ 15) − any tax-free pension lump sum. For a €65k salary and 8 years' service that's about €34,600 tax-free.
Take the highest, not the sum
You claim whichever exemption is biggest — not all of them. Getting this wrong is one of the most common redundancy mistakes we see.