Ex gratia payment

Ex gratia payment

Ex gratia payment is meant to be a goodwill gesture from the employer to the employee. The amount was meant to cushion the employee after losing the job out of redundancy. As for the employer, Cathy Pacific limited will not be liable in terms of the admittance that they were to offer their employee with the payment. The ex-gratia payment that Cathy pacific limited was to pay was voluntary and thus are not compelled to make the payment. However, in some other states, the payment is not subjected to a federal and state income tax

Reference

Investopedia. 2020. Ex Gratia Payments And Why Companies Make Them. [online] Available at: <https://www.investopedia.com/terms/e/ex-gratia-payment.asp> [Accessed 18 August 2020].