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 Severance
Payments as Compensation
Qualified employees who have had his or her employment
“severed” are eligible for severance payments as compensation.
Severance pay may also be paid to employees who have lost their
seniority and job related benefits and may also be paid for an
employee’s long service recognition.
Severance Payments in Ontario, Canada
Individual’s severance pay in Ontario is also sometimes
known as a retiring allowance. Severance packages in Ontario may
have been as a result of being let go from a job for a variety
of reasons, or it may have come as a result of factors such as
used sick days at retirement. The bottom line is that there are
options available for your severance package in Ontario and each
option may have different tax consequences.
Severance Packages Ontario
Severance packages in some cases can be transferred
directly into a Registered Retirement Savings Plan (RRSP). By
transferring funds directly into a RRSP, the funds would not be
taxed, in addition to avoiding things such as employment insurance
premiums. There is a maximum amount that can be transferred in
an RRSP on a tax free basis under tax legislation.Individuals
are allowed to transfer up to $2000 for each full year or part
year of service with an employer prior to 1996 and an additional
$1500 for each year of service prior to 1989 (in which an employer’s
contributions to a Registered Pension Plan had not vested to the
employee)
 Severance
Packages Ontario – Plan to receive your funds
Individuals receiving severance packages in Ontario
should carefully plan for receiving their funds. In many cases,
some decisions have to be made with regards to their company pension
plan if one exists.Visit Guaranteedinvestments.com
if you need to make some financial, tax or investment decisions
regarding your personal situation and your severance package in
Ontario.
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provides a wide variety of investment products to risk adverse
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Annuities, GICs, Guaranteed Minimum Withdrawal Benefit Plans,
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Planning Tip #6 – Insurance Based Investments
Severance packages in Ontario can be hard to understand.
Ensure you receive professional financial, tax and investment
advice. In most cases, if not in all cases, once you make a decision
there is no turning back.
Contact Guaranteedinvestments.com
today!
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