See also ‘Redundancy Pay’ – Statutory redundancy payments made to employees are not taxable. Therefore, the entire statutory redundancy lump sum made to employees is tax free. In addition, discretionary ex-gratia redundancy payments made on top of the statutory lump sum qualify for a tax exemption. This additional sum is not taxable, up to €10,160 plus €765 per complete years’ service. For example, if an employee is entitled to statutory redundancy of €2000 this is tax free. If this employee has worked for 5 years then any ex-gratia payment over and above the €2000 is tax-free up to€10,160 + (€765 x 5 years)] = €13985.