Tax position on severance
 

Quick question - Sorry exciting and stressful evening as just recieved job offer!

If I were to get severance from my company would it be taxable at standard rates? In uk severance us tax free up to £30K and wasn't sure if was same in Canada or not?

Re: Tax position on severance
 

Firstly, you should know that severance in Canada is nothing like as generous as in the UK. It is not tax free but some (depending on length of employment) can be tax sheltered in a special type of account. The whole issue is somewhat complicated for this post but more detailed information is probably available in WIKI in blue bar at top of page.

Re: Tax position on severance
 

Severance pay is taxable. You would be able to transfer severance pay into an RRSP to the extent that you have built up contribution room. The complicated rules the Auld Yin refers to only apply if you were working for the same employer before 1996.