Collective redundancy severance payments will have an exemption limit of 180,000 euros

The Dirección General de Tributos (DGT) has clarified the tax treatment of amounts received by workers in the context of a collective redundancy, establishing the applicable exemption limits for Personal Income Tax (IRPF).

What the DGT has resolved

The ruling establishes that the portion of the collective redundancy severance payment that is exempt from taxation is capped at the lesser of the following two amounts:

• The amount established in the Workers' Statute for unfair dismissal.
• The amount of 180,000 euros.

Any excess over this limit will be considered employment income in kind or in cash and must be taxed in the general taxable base. However, the 30% reduction could be applied to said excess, provided that the requirements for generating income and the amount limits provided for in the regulations are met.

Regarding contributions to special agreements, if these are borne by the employer, they are not taxed for the worker. However, if the employee assumes the cost, the amount paid by the company is considered full employment income. Finally, regarding health insurance premiums, these maintain their exemption up to a limit of 500 euros annually per person, which increases to 1,500 euros in the case of disability.

What it means for you

For workers affected by a collective redundancy, it is fundamental to identify that the exemption is not unlimited. If the agreed severance exceeds the legal limit or 180,000 euros, the surplus will increase the employee's IRPF taxable base.

For companies, this criterion requires precise management in the settlement of severance payments and in the control of health insurance premiums paid, ensuring that exemption limits are correctly applied to avoid errors in withholding.

What should be done

It is necessary to verify the exact amount of the severance and compare it with the limits of the Workers' Statute and the 180,000 euro cap to determine the portion subject to taxation. Likewise, it must be checked whether the excess allows for the application of the 30% reduction according to current regulations. It is recommended to assess each particular situation to ensure compliance with tax obligations.