A retiring allowance is a payment made to an employee when they have finished employment completely because of:
It is not based on the age of the employee.
A redundancy payment is different from a retiring allowance. Redundancy is when a termination of employment is the employer's decision.
Redundancy payments may be made to:
Both types of payment are taxed at the lump sum rates, but are not liable for ACC earners' levy.
To treat a payment as a retiring allowance or redundancy payment, the person's employment must have been terminated. If employment is not terminated, the payment is liable for earners' levy.