Teachers' back-pay taxed at 48% rate
The Federation has received a number of calls from members concerning the 2% backpayment payment which was negotiated as part of the salaries settlement.
The Federation has received a number of calls indicating that the 2% backpayment payment which was negotiated as part of the salaries settlement as a one off payment has been taxed at a very high marginal rate of approximately 48%.
The Federation made representations to the Department about the tax rate on this backpayment several weeks ago because we were of the opinion that it should be taxed at a concessional rate. The Department claimed that their tax advice was that this payment was not eligible for a concessional rate and hence applied the higher rate.
The Federation has made representations to the Ministry about this matter.