Extract from the second LRIS June bulletin - ... There is one way - TopicsExpress

Extract from the second LRIS June bulletin - ... There is one way in which the impact of tax on a long service award might be minimized, and that is to treat a long-service award as part of an annual bonus. Since a bonus is conventionally seen as an additional payment over and above normal wages, I think one could justifiably maintain that a payment in recognition of long service is also a form of bonus. From 1st November 2012 the tax-free threshold for any aggregate of bonuses and performance-related awards in one year was set at $1 000. This was covered in the November 2012(3) bulletin in this series. So (unless the long-serving employee’s ordinary annual bonus in the year he or she is due a long service award is already more than $1 000) adding any long service award in as a second bonus for that year, rather than as ordinary pay, might be tax- efficient.

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