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V0445-20 26 February 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Dismissal compensation exempt up to Workers' Statute or €180,000 limit

The consultant asks about the tax treatment of her dismissal payment, her special social security agreement, and pension plan contributions. The DGT states that dismissal compensation has exemption limits and that pension plan contributions are species income subject to 30% reduction.

The question raised

Tax treatment, under Personal Income Tax (IRPF), of the various economic concepts received by the taxpayer due to the termination of the employment relationship.

The DGT's ruling

Compensation for collective redundancy is exempt up to the lesser of the amount established by the Workers' Statute for unfair dismissal or 180,000 euros. The excess is taxed as income from employment, and the 30% reduction may be applied if the requirements for installment payments are met. Employer contributions to the pension plan are considered full income from employment in kind. Contributions to the special agreement paid by the company have no tax impact if borne by the employer, but if borne by the employee, they constitute remuneration in kind.

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