--- title: "Redundancy and Severance Tax Calculator Ireland 2026: Statutory, SCSB and the €200,000 Cap" url: https://decisionscalc.com/tools/ireland-severance-tax-calculator/ description: "How much of your Irish redundancy or severance package is tax-free: statutory redundancy, the basic and increased exemptions, SCSB with or without your pension lump sum, the €200,000 lifetime cap, and income tax and USC on the rest." publisher: DecisionsCalc note: General information, not financial, tax or legal advice. Figures name their source and the date they were read. --- [IE · figures checked 6 Nov 2026](https://decisionscalc.com/methodology/) Tax · Ireland # Redundancy and severance tax calculator (Ireland) Statutory redundancy is **tax-free**. Of the rest of your package, the highest of the basic exemption, the increased exemption and **SCSB** is tax-free too, up to **€200,000** in your lifetime. Anything above that is taxed as pay. Enter your package to see what you keep, and whether giving up your pension lump sum would leave you better off. **Official rules:** Revenue Tax and Duty Manual [Part 05-05-19, Taxation of Termination Payments](https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.pdf) (updated March 2026; this calculator reproduces all 11 of its worked examples), and the Revenue pages on the [basic exemption](https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/basic-exemption.aspx), the [increased exemption](https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/increased-exemption.aspx) and [SCSB](https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/lump-sum-payments/standard-capital-superannuation-benefit.aspx). Read 6 November 2026. Income tax and USC use the 2026 and Budget 2027 bands. Not included: the €5,000 retraining exemption, payments on death, injury or disability, and foreign service relief. Part years count for statutory redundancy by month, not by day. General information, not tax advice. ## Leaving near retirement? See how long the money lasts: our free [Can I retire at 60? calculator](https://decisionscalc.com/tools/ireland-retirement-calculator/) runs your pension, lump sum, ARF and the bridge to the State Pension at 66, year by year. The [Irish Retirement Planner](https://decisionscalc.com/irish-retirement-planner/) spreadsheet does the same for a couple, with three scenarios side by side. [Run the retirement calculator](https://decisionscalc.com/tools/ireland-retirement-calculator/) ## How it is worked out 1. **Statutory redundancy** (2 weeks' pay per year of service plus 1 week, pay capped at €600 a week) is tax-free and sits outside everything below. 2. **Basic exemption:** €10,160 plus €765 for each complete year of service. 3. **Increased exemption:** up to €10,000 more, less your tax-free pension lump sum, if you had nothing above the basic exemption in the last ten years. 4. **SCSB:** average pay over the last 3 years × complete years ÷ 15, less your tax-free pension lump sum. 5. The **highest** of these is tax-free, up to €200,000 for your lifetime, less what earlier payments used. 6. The rest is taxed as pay when it is paid: **income tax and USC, no PRSI**. ## Before you sign - Ask the pension administrator, in writing, for the value of your tax-free lump sum at your leaving date. It drives the SCSB figure. - If waiving the lump sum pays, the waiver must reach the scheme administrator **on or before your leaving date**, and it cannot be undone. - Check how the package is worded: anything due under your contract is taxed in full. Your employer applies the exemption through payroll; if they don't, claim it from Revenue through MyEnquiries. - Had severance before? Payments since 2019 are reported to Revenue through payroll, so Revenue can tell you what is on record. ## Frequently asked questions **How much of a severance payment is tax-free in Ireland?** Statutory redundancy is fully tax-free. On top of that, the highest of three exemptions applies to the rest of the package: the basic exemption (€10,160 plus €765 for each complete year of service), the increased exemption (up to €10,000 more) or SCSB (your average pay over the last 3 years × years of service ÷ 15, less your tax-free pension lump sum). The total is capped at €200,000 for your lifetime. **How is statutory redundancy calculated?** 2 weeks' pay for every year of service plus 1 extra week, with weekly pay capped at €600. You need 104 weeks of continuous service and the job must genuinely go. It is free of income tax, USC and PRSI, and it does not use up any of the other exemptions. **What is SCSB?** The Standard Capital Superannuation Benefit: your average yearly taxable pay over the last 36 months (salary, bonus, overtime, benefits in kind) times your complete years of service, divided by 15, less the "relevant capital sum": any tax-free lump sum from your employer's pension scheme, including the value today of one you will get at retirement. It usually beats the basic exemption for long service and higher pay. **Should I give up my pension lump sum to get the full SCSB?** You can sign an irrevocable waiver of the tax-free pension lump sum from that job, which removes it from the SCSB sum and can restore the increased exemption. You must send it to the pension scheme administrator on or before your leaving date. It only pays if the extra tax-free severance now beats the tax-free lump sum you give up; this calculator shows the difference. **How is the taxable part taxed?** As pay, at the time it is paid: income tax at your marginal rate and USC. PRSI is not charged on it. Top-slicing relief was abolished, so a large lump sum can push the excess into the 40% band and the 8% USC rate. **Does the €200,000 limit include my pension lump sum?** No. The €200,000 lifetime cap covers the basic, increased and SCSB exemptions on all your termination payments since they began. Your pension lump sum has its own separate €200,000 tax-free lifetime limit; it only reduces the increased exemption and SCSB, as above. **Is pay in lieu of notice tax-free?** Only if your contract does not provide for it. A payment you are entitled to under your contract, including contractual pay in lieu of notice, is taxed in full as pay and gets none of these exemptions. So do holiday pay, arrears and bonuses owed. ## Related - [Jobseeker's Benefit calculator](https://decisionscalc.com/tools/ireland-jobseekers-benefit-calculator/): pay-related benefit after a redundancy. - [Pension tax relief calculator](https://decisionscalc.com/tools/ireland-pension-tax-relief-calculator/): putting part of the lump sum into a pension. - [Where should my money go?](https://decisionscalc.com/tools/ireland-savings-investment-calculator/) State Savings, deposits, ETFs and pension after tax. Our planner [Irish Retirement Planner](https://decisionscalc.com/irish-retirement-planner/) Your retirement year by year to 95, alone or as a couple: lump sum tax, ARF drawdown, State Pension at 66, income tax, USC and PRSI. US$15 one-time · Excel and Google Sheets · Irish State Pension, tax and USC [See inside the planner →](https://decisionscalc.com/irish-retirement-planner/) ## Get an email when Irish rules change Tax bands, allowances and benefit rates change every year. We email you when a rule our Irish calculators use changes, usually a few times a year. Confirm by email; unsubscribe in one click. Was this page useful? **Report a wrong figure or missing information**