Redundancy Pay Calculator
Work out your redundancy pay, notice and unused leave, how much is tax-free, and what you take home after tax.
- Tax-free limit 2026–27$13,598 + $6,801 per year
- Checked29 October 2026
| How it is worked out | Amount |
|---|
| NES service | Weeks | At your pay |
|---|
NES redundancy and notice under the Fair Work Act 2009. Tax-free limits and ETP caps from the ATO for 2026–27 and 2025–26. Tax shown is the maximum rate on each part.
The full NES redundancy scale and notice, including the over-45 week.
2026–27 limit of $13,598 plus $6,801 per complete year of service.
Add unused leave and extra weeks from your agreement or policy.
A one-page breakdown to check against your final pay.
How the redundancy pay calculator works
Enter your start date, your last day, your base weekly pay for ordinary hours and your age on your last day. Choose whether your employer has 15 or more employees, add any extra weeks your enterprise agreement or redundancy policy gives on top of the NES, and enter the dollar value of any unused annual leave and long service leave being paid out. Tick whether your notice is being paid out and whether the redundancy is genuine.
The calculator counts your complete years of service, looks up your NES redundancy pay and notice period, adds your extra weeks, and values each part. It then works out the tax-free limit for your service, splits your payment into the tax-free part and the taxable employment termination payment, applies the maximum tax rate to each part, and shows your estimated take-home. It also shows the full NES scale at your pay.
The calculation, step by step
- Count complete years of service. Partial years do not count for NES redundancy pay or for the tax-free limit.
- Find your redundancy weeks from the NES scale, plus any extra weeks under your agreement or policy.
- Find your notice weeks, adding a week if you are over 45 with at least 2 years of service.
- Value each part at your base weekly pay.
- Work out the tax-free limit. $13,598 plus $6,801 for each complete year of service in 2026–27.
- Split the payment. Redundancy pay and pay in lieu of notice up to the limit are tax-free; the rest is a taxable ETP.
- Apply the tax rates to the ETP and to unused leave.
NES redundancy pay and notice
| Continuous service | NES redundancy pay | NES notice (under 45) | Notice (over 45, 2+ years) |
|---|---|---|---|
| Less than 1 year | Nil | 1 week | 1 week |
| 1 to under 2 years | 4 weeks | 2 weeks | 2 weeks |
| 2 to under 3 years | 6 weeks | 2 weeks | 3 weeks |
| 3 to under 4 years | 7 weeks | 3 weeks | 4 weeks |
| 4 to under 5 years | 8 weeks | 3 weeks | 4 weeks |
| 5 to under 6 years | 10 weeks | 4 weeks | 5 weeks |
| 6 to under 7 years | 11 weeks | 4 weeks | 5 weeks |
| 7 to under 8 years | 13 weeks | 4 weeks | 5 weeks |
| 8 to under 9 years | 14 weeks | 4 weeks | 5 weeks |
| 9 to under 10 years | 16 weeks | 4 weeks | 5 weeks |
| 10 years or more | 12 weeks | 4 weeks | 5 weeks |
Tax-free limit by years of service
| Complete years of service | Tax-free limit 2026–27 | Tax-free limit 2025–26 |
|---|---|---|
| 0 | $13,598 | $13,100 |
| 1 | $20,399 | $19,652 |
| 2 | $27,200 | $26,204 |
| 3 | $34,001 | $32,756 |
| 5 | $47,603 | $45,860 |
| 10 | $81,608 | $78,620 |
| 15 | $115,613 | $111,380 |
| 20 | $149,618 | $144,140 |
How each part is taxed
| Part of the payout | Under 60 | 60 or older |
|---|---|---|
| Tax-free redundancy amount (genuine redundancy) | Nil | Nil |
| ETP up to the $270,000 cap | 32% | 17% |
| ETP above the cap | 47% | 47% |
| Unused annual leave (genuine redundancy) | Up to 32% | Up to 32% |
| Unused long service leave after 17 August 1993 (genuine redundancy) | Up to 32% | Up to 32% |
How it works in plain English
A redundancy payout is usually several different payments bundled together, each with its own rules. Redundancy pay compensates you for losing your job, and the NES sets a minimum based on your service. Notice is the period your employer must give you, which they can pay out instead. Unused annual leave and long service leave are entitlements you have already earned.
The tax treatment is generous for genuine redundancies. The tax-free limit covers most or all of the redundancy and notice pay for many people. For example, an employee with 6 years of service has a tax-free limit of $54,404, which is more than 30 weeks of pay at $1,800 a week. Only payments above the limit, and the leave, are taxed, and then at capped rates. Sources: ATO: Employment termination payments, Fair Work Ombudsman: Redundancy and Fair Work Ombudsman: Notice and final pay.
What makes a redundancy genuine
There are two separate tests, and it helps to keep them apart.
The Fair Work test decides whether a dismissal is a genuine redundancy for unfair dismissal purposes. Under section 389 of the Fair Work Act, it is genuine if the employer no longer requires your job to be performed by anyone because of changes in its operational requirements, has complied with any obligation in an award or enterprise agreement to consult about the redundancy, and it would not have been reasonable to redeploy you within the business or an associated entity. If the redundancy is not genuine, you may be able to make an unfair dismissal claim, usually within 21 days of the dismissal.
The tax test decides whether part of your payment is tax-free. Under the tax law, a genuine redundancy payment is one received because your position was genuinely redundant, where you were dismissed before the age at which you can receive the Age Pension, the payment is made at arm’s length, there was no arrangement to employ you again, and the amount is more than you would have received if you had resigned or retired voluntarily. If these conditions are met, your redundancy pay and pay in lieu of notice qualify for the tax-free limit.
Voluntary redundancies can still be genuine redundancies, as long as the position is abolished and the other conditions are met. If you are over Age Pension age when dismissed, the tax-free amount does not apply, and the payment is taxed as an ordinary ETP.
What pay rate is used
NES redundancy pay and notice in lieu are calculated differently from leave:
- NES redundancy pay uses your base rate of pay for your ordinary hours. That excludes incentive payments, bonuses, loadings, monetary allowances, overtime and penalty rates.
- Pay in lieu of notice uses your full rate of pay for the hours you would have worked during the notice period, which can include allowances and loadings that would have been paid.
- Unused annual leave is paid at the rate you would have received if you had taken it, and many awards include leave loading of 17.5% on termination.
- Unused long service leave is paid at your ordinary rate under your state’s law.
For part-time employees, the base rate is for their ordinary hours. If your hours changed recently, check which hours your award or agreement uses. The calculator uses a single base weekly figure for redundancy and notice; enter your leave payouts separately in dollars.
Counting your years of service
NES redundancy pay depends on continuous service with your employer, which generally includes paid leave and periods of unpaid leave that are authorised by the award, agreement or law. Unpaid leave, other than community service leave and some stand-downs, generally does not count towards the length of service but does not break continuity. Service with a previous employer can count if there was a transfer of business.
The tax-free limit uses complete years of service in the employment that ends, and can include service with associated employers and previous employers in some cases. The years are counted to the day: someone who started on 1 July 2020 and finishes on 30 June 2026 has 5 complete years, not 6. Leaving one day later would add a whole year to the tax-free limit, worth $6,801 in 2026–27. If your last day is close to an anniversary, check the date carefully.
Employment termination payments in detail
An employment termination payment (ETP) is a lump sum paid because your employment ended. It includes redundancy pay above the tax-free limit, pay in lieu of notice where it is not part of a genuine redundancy payment, gratuities and golden handshakes, payments for unused rostered days off, and compensation for loss of a job. It does not include unused annual leave, unused long service leave or the tax-free part of a genuine redundancy payment.
The taxable part of an ETP is taxed at a concessional rate up to the ETP cap, which is $270,000 for 2026–27 and $260,000 for 2025–26. Genuine redundancy payments are “excluded” ETPs, so only the ETP cap applies to them. For other ETPs, a separate whole-of-income cap of $180,000 can also apply, reducing the amount taxed at the concessional rate if your other income for the year is high. The calculator assumes a genuine redundancy and applies only the ETP cap.
Your employer withholds tax from the ETP at the rates in the ATO’s withholding schedule for ETPs, and reports the payment on your income statement. ETPs are included in your tax return but taxed separately from your other income, with a tax offset that keeps the rate at the capped level. If you receive more than one ETP from the same termination, they share the same cap.
Unused leave on redundancy
Unused annual leave and unused long service leave are paid out with your final pay. On a genuine redundancy, both are taxed at no more than 30% plus the Medicare levy, which is 32%, whatever your marginal rate. That can be a saving for people on the 37% or 45% rates, and is the same as the normal rate for most people on the 30% rate.
Long service leave depends on your state. Redundancy is a qualifying reason for pro rata long service leave in every state and territory, so employees with 7 or more years of service, or 5 or more in NSW and the ACT, are usually entitled to a payout. Our long service leave calculator works out the weeks and dollars for your state.
Unused personal leave (sick and carer’s leave) is not paid out on termination in most cases, unless your award or agreement says otherwise. Leave loading on annual leave is paid if your award or agreement provides for it on termination.
Small businesses and other exclusions
The NES redundancy pay obligation does not apply to an employer with fewer than 15 employees at the time of the dismissal. The count includes the employee being made redundant, other employees being made redundant at the same time, and regular and systematic casual employees, and it can include employees of associated entities. Notice still applies to small businesses, so employees of a small business still get notice or pay in lieu.
Some awards provide redundancy pay for small business employees in particular industries, and an employment contract can provide redundancy pay even if the NES does not. If you work for a small business, check your award and contract.
Other employees not covered by NES redundancy pay include casuals, employees on fixed-term or task contracts that end at the term, apprentices and trainees, employees dismissed for serious misconduct, and employees with an industry-specific redundancy scheme in their award or agreement.
What should happen during a redundancy
- Consultation. If your award or agreement requires it, your employer must consult with you before a final decision, explain the reasons, and consider your views.
- Redeployment. Your employer should consider whether you can be redeployed to another suitable role in the business or an associated entity.
- Written notice. You must receive written notice of the termination date, or pay in lieu.
- Final pay. Most awards require final pay within 7 days of the last day.
- Payment summary. The payout will appear on your income statement in myGov at the end of the financial year, with the ETP shown separately.
- Separation certificate. If you will claim Centrelink payments, ask for an Employment Separation Certificate.
A worked example by hand
Here is the calculator’s default example. An employee started on 1 July 2020 and their last day is 6 November 2026, so they have 6 complete years. Their base pay is $1,800 a week, they are 42, their employer has more than 15 employees, notice is paid out, and they have $5,000 of unused annual leave.
Redundancy pay: 6 to under 7 years is 11 weeks under the NES, so 11 × $1,800 = $19,800.
Notice: more than 5 years is 4 weeks, and they are under 45, so 4 × $1,800 = $7,200.
Tax-free limit: $13,598 + 6 × $6,801 = $54,404. Redundancy and notice total $27,000, which is under the limit, so it is all tax-free.
Leave: $5,000 at 32% = $1,600 of tax.
Take-home: $32,000 − $1,600 = $30,400.
Making a payout last
A redundancy payout is often the largest lump sum someone receives outside of selling a home. Some practical steps:
- Work out your runway. Divide the payout by your monthly essential expenses to see how many months it covers.
- Keep it accessible. A high-interest savings account or offset account keeps the money available while you look for work.
- Clear expensive debt. Paying off a credit card at 20% interest saves more than most investments earn.
- Be careful with big decisions. Avoid committing to large purchases or investments until your next job is settled.
- Check Centrelink first. A large balance can delay payments under the liquid assets waiting period.
- Consider super. If you are close to retirement, a personal contribution may make sense, within the contribution caps.
Voluntary and forced redundancy
A forced redundancy is where your employer decides your job is no longer needed and ends your employment. A voluntary redundancy is where your employer asks for volunteers, or offers a package, and you accept. Both can be genuine redundancies for tax purposes if the position is abolished and the tax conditions are met, so the same tax-free limit applies.
Voluntary redundancy offers are often more generous than the NES, because the employer wants enough people to accept. Before you accept, compare the package with what you would receive under the NES and your agreement if you were made redundant anyway, and with the value of staying, including future salary, super and long service leave you have not yet reached. Ask whether the offer includes notice, leave payouts, outplacement support or help with retraining.
If you resign instead, you are generally not entitled to redundancy pay, and any payment you receive is unlikely to be a genuine redundancy payment. If you think your job is about to be made redundant, wait for the employer’s decision before resigning.
Negotiating a redundancy package
The NES sets a minimum, not a maximum. Depending on your situation, it may be possible to negotiate more, especially in a voluntary redundancy or where your employer wants something from you, such as help with a handover or a release from claims.
- Know your minimums. Work out your NES, agreement and policy entitlements first, so you know what you are owed regardless.
- Ask about timing. A later last day can take you past a service anniversary, adding a week of redundancy pay or increasing your tax-free limit.
- Ask about extras. Outplacement services, a reference, keeping a laptop or phone, or extra weeks of pay are common requests.
- Read any release carefully. If you are asked to sign a deed of release giving up claims in exchange for extra money, consider getting legal advice before signing.
- Check the tax. Extra amounts paid because of a genuine redundancy are usually part of the genuine redundancy payment and share the tax-free limit.
Redundancy and Centrelink
If you need income support after a redundancy, Services Australia will look at your termination payments and savings before payments start. Two rules commonly apply:
- Income maintenance period. Leave payments, such as unused annual leave and long service leave, are treated as income for the period they cover. Payments may not start until that period ends.
- Liquid assets waiting period. If your readily available funds, including a redundancy payout in the bank, are over the threshold, there is a waiting period of up to 13 weeks before some payments start.
Redundancy pay itself is generally not treated as income for the income maintenance period, but it counts towards your liquid assets. Ask your employer for an Employment Separation Certificate, which Services Australia uses to work out your entitlements, and contact them early to understand your position.
Special situations
On parental leave. You can be made redundant while on parental leave, but only if the redundancy is genuine and not because of your leave. You are entitled to redundancy pay and notice in the usual way, and under the Fair Work Act you have a right to return to your pre-leave position or, if it no longer exists, an available position you are qualified for that is nearest in status and pay.
On workers’ compensation or sick leave. Employers must be careful about ending the employment of someone who is on workers’ compensation or temporarily absent because of illness, as there are protections under both state workers’ compensation laws and the Fair Work Act. A genuine redundancy can still occur, but it must not be because of the absence.
Close to retirement. If you are made redundant after reaching Age Pension age, the payment cannot be a genuine redundancy payment for tax, so there is no tax-free amount. The taxable ETP is taxed at 17% (including Medicare) because you are over 60, up to the ETP cap.
Business insolvency. If your employer becomes insolvent and cannot pay your entitlements, the Fair Entitlements Guarantee scheme may pay unpaid wages, annual leave, long service leave, payment in lieu of notice and up to 4 weeks of redundancy pay per year of service, subject to caps.
Public sector redundancy
Public servants are often covered by redundancy schemes that are more generous than the NES. Commonwealth and many state public sector agreements provide 2 weeks of pay per year of service, with a minimum and maximum number of weeks, plus a retention or notice period during which the agency tries to redeploy the employee. Some state schemes add incentive payments for voluntary redundancies.
If you work in the public sector, use the calculator’s “extra weeks” box to add the difference between your scheme and the NES. For example, with 15 years of service under a scheme of 2 weeks per year, you would receive 30 weeks: 12 under the NES and 18 extra. The tax rules are the same: the tax-free limit applies to genuine redundancies, and anything above it is an ETP.
Redundancy in your tax return
After the end of the financial year, your income statement in myGov will show your salary up to your last day, unused leave payments, and any ETP, with the tax withheld from each. The tax-free part of a genuine redundancy payment is not shown as income and does not need to be included in your tax return.
The ETP is included in your return, but it is taxed separately from your other income using the capped rates, and a tax offset ensures the rate does not go above the cap. Unused leave paid on a genuine redundancy is shown as a lump sum and also has its rate capped. Because the rest of your income for the year may be lower than usual, especially if you are between jobs for a while, the tax withheld from your normal salary may have been too high, so many people receive a refund in the year of a redundancy.
If you start a new job in the same year, tell your new employer whether to claim the tax-free threshold. Generally you should only claim it with one employer at a time, but if your old job has ended you can claim it with the new employer.
Super after a redundancy
Your employer must pay super guarantee on your ordinary pay up to your last day, but not on redundancy pay, pay in lieu of notice or unused leave paid on termination. Check your super account a month or two after you leave to make sure the final contributions arrived.
You cannot roll an ETP into super, but you can contribute some of your payout as a personal contribution. A contribution you claim as a tax deduction counts towards the concessional cap of $32,500 for 2026–27, including any employer contributions earlier in the year, and you may be able to use unused cap amounts from previous years if your total super balance is under $500,000. A contribution you do not claim counts towards the non-concessional cap. If you are close to retirement, a financial adviser can help you weigh up contributing to super against keeping the money available.
If you were salary sacrificing into super, those arrangements stop when your employment ends. If you have insurance in your super fund, check that it continues after you stop receiving employer contributions, because some policies lapse if the account is inactive.
Questions to ask HR
- Which award, agreement or policy sets my redundancy pay, and how many weeks am I entitled to?
- What date is my last day, and how many complete years of service will I have on that day?
- Will my notice be worked or paid out, and at what rate?
- How much annual leave and long service leave will be paid out, and does the annual leave include leave loading?
- Will the payment be treated as a genuine redundancy for tax?
- When will I receive my final pay, and will I get an Employment Separation Certificate?
- Is there any redeployment option, outplacement support or employee assistance program available?
Ask for the answers in writing, and compare them with this calculator’s estimate. If the figures do not match, ask HR or payroll to explain the difference before your last day.
It is also worth asking for a copy of your full employment record, including your start date, any transfers between related companies, and periods of unpaid leave. These details decide your years of service, which drive both your redundancy weeks and your tax-free limit. A one-year difference in recorded service can change your payout and your tax by thousands of dollars, and errors are much easier to fix before your final pay is processed than afterwards.
If you think the redundancy is not genuine
Sometimes a redundancy is used to end the employment of a particular person rather than because the job is no longer needed. Signs that a redundancy may not be genuine include the employer advertising the same role soon after, giving your duties to a new hire rather than sharing them among existing staff, not following the consultation steps in your award or agreement, or not considering whether you could be redeployed.
If the redundancy is not genuine, you may be able to make an unfair dismissal application to the Fair Work Commission, as long as you meet the eligibility rules, including the minimum employment period. The time limit is short: generally 21 days from the date the dismissal took effect. If you believe you were made redundant because of a protected attribute or for exercising a workplace right, such as taking parental leave or making a complaint, a general protections claim may be possible, also within 21 days.
Act quickly and keep records: the redundancy letter, emails about the restructure, the job advertisement if the role is re-advertised, and notes of any meetings. The Fair Work Ombudsman, a union or an employment lawyer can explain your options. Accepting your redundancy pay does not necessarily stop you from making a claim, but signing a deed of release may, so get advice before signing one.
Glossary
- Genuine redundancy: a dismissal because the employer no longer needs the job done by anyone, meeting the Fair Work and tax conditions.
- National Employment Standards (NES): the minimum entitlements for most employees under the Fair Work Act, including redundancy pay and notice.
- Pay in lieu of notice: payment instead of working the notice period.
- Tax-free limit: the amount of a genuine redundancy payment that is tax-free, $13,598 plus $6,801 per complete year of service in 2026–27.
- Employment termination payment (ETP): a lump sum paid because employment ended, taxed at capped rates up to the ETP cap.
- ETP cap: the maximum ETP taxed at the concessional rate, $270,000 in 2026–27.
- Preservation age: 60 for everyone born on or after 1 July 1964, the age from which the lower 17% ETP rate applies.
Common redundancy pay mistakes
- Counting partial years. Only complete years count for the NES scale and the tax-free limit.
- Using the full rate for redundancy pay. NES redundancy pay uses the base rate, without allowances or loadings.
- Missing the extra week of notice for employees over 45 with 2 or more years of service.
- Forgetting pro rata long service leave. Redundancy is a qualifying reason in every state.
- Assuming everything is tax-free. Leave is taxed, and redundancy pay over the limit is taxed as an ETP.
- Missing a better agreement scale. Many agreements pay more than the NES, especially after 10 years.
How we tested this calculator
| Check | Expected | Calculator |
|---|---|---|
| 6 years, $1,800, notice paid, $5,000 leave | $27,000 tax-free, $1,600 tax, $30,400 | $30,400.00 |
| Tax-free limit, 6 years, 2026–27 | $13,598 + 6 × $6,801 = $54,404 | $54,404 |
| 9 years, age 52, notice | 4 + 1 = 5 weeks | 5 weeks |
| 9 years, $98,400 redundancy and notice | $23,593 ETP × 32% = $7,549.76 | $7,549.76 |
| Fewer than 15 employees | No NES redundancy pay, notice still paid | $0 redundancy |
| Less than 1 year of service | No redundancy pay, 1 week notice | $0 redundancy |
| Not a genuine redundancy | No tax-free amount, $27,000 ETP at 32% | $8,640 |
The calculator assumes an Australian resident with a single termination. It does not apply the whole-of-income cap for non-genuine ETPs, pre-1993 leave rules, invalidity or death benefit ETPs, or Centrelink effects.
Three real Australian examples
All figures come from this calculator’s engine, using 2026–27 limits.
Scenario A: Ryan, logistics coordinator in Perth
Ryan, 42, started on 1 July 2020 and is made redundant with a last day of 6 November 2026. His base pay is $1,800 a week, his employer has 300 staff, and his notice is paid out. He has $5,000 of unused annual leave.
| Amount | |
|---|---|
| Service | 6 complete years |
| NES redundancy pay (11 weeks × $1,800) | $19,800 |
| Pay in lieu of notice (4 weeks) | $7,200 |
| Unused annual leave | $5,000 |
| Total before tax | $32,000 |
| Tax-free limit ($13,598 + 6 × $6,801) | $54,404 |
| Tax-free redundancy and notice | $27,000 |
| Tax on annual leave (32%) | $1,600 |
| Take-home | $30,400 |
Result: all of Ryan’s redundancy and notice pay is within his tax-free limit of $54,404. Only his annual leave is taxed, at 32%. He takes home $30,400 of the $32,000 total. Because his redundancy pay is tax-free, it does not count towards his taxable income for the year.
Scenario B: Karen, finance manager in Sydney
Karen, 52, has 9 complete years of service and earns a base of $2,400 a week. Her company’s redundancy policy gives 4 weeks per year of service, 20 weeks more than the NES. She is paid 5 weeks’ notice, $8,000 of annual leave and $18,720 of pro rata long service leave, because NSW pays long service leave on redundancy from 5 years.
| Amount | |
|---|---|
| Service | 9 complete years |
| Redundancy (16 NES weeks + 20 extra = 36 weeks × $2,400) | $86,400 |
| Pay in lieu of notice (5 weeks, over 45) | $12,000 |
| Unused annual leave | $8,000 |
| Pro rata long service leave (NSW) | $18,720 |
| Total before tax | $125,120 |
| Tax-free limit ($13,598 + 9 × $6,801) | $74,807 |
| Taxable ETP ($98,400 − $74,807) | $23,593 at 32% = $7,549.76 |
| Tax on leave ($26,720 at 32%) | $8,550.40 |
| Take-home | $109,019.84 |
Result: her redundancy and notice total $98,400, which is $23,593 over her tax-free limit of $74,807. That excess is an ETP taxed at 32%, or $7,549.76. Her leave is taxed at 32% because it is paid on a genuine redundancy. She takes home $109,019.84 of $125,120.
Scenario C: Tony, plant operator in Geelong
Tony, 61, has 22 complete years of service and earns $2,000 a week. His enterprise agreement gives 2 weeks per year of service. He is also paid 5 weeks’ notice, $10,000 of annual leave and $38,133.33 of long service leave under Victorian law.
| Agreement (2 weeks a year) | NES only | |
|---|---|---|
| Service | 22 complete years | 22 complete years |
| Redundancy weeks | 44 | 12 |
| Redundancy pay | $88,000 | $24,000 |
| Pay in lieu of notice (5 weeks) | $10,000 | $10,000 |
| Unused annual leave | $10,000 | $10,000 |
| Unused long service leave (VIC) | $38,133.33 | $38,133.33 |
| Tax-free limit | $163,220 | $163,220 |
| Tax (leave at 32%) | $15,402.67 | $15,402.67 |
| Take-home | $130,730.66 | $66,730.66 |
Result: with 22 years, Tony’s tax-free limit is $163,220, which covers all of his $98,000 of redundancy and notice pay, so the 17% rate for people aged 60 and over never applies. He pays tax only on his leave. Under the NES alone he would receive just 12 weeks of redundancy pay, so his agreement is worth an extra $64,000. That is why it is important to check your agreement or policy, not just the NES.
Three expert tips
Tip 1: Check your agreement, not just the NES
Many enterprise agreements, public sector policies and contracts give more than the NES, often 2 to 4 weeks per year of service with a cap. The NES scale also drops from 16 to 12 weeks at 10 years, which agreements often fix. Ask HR for the clause that applies to you. If there is a cap on the number of weeks, check whether it applies before or after any minimum, because the order can change the result.
Tip 2: Check the pay rate used
NES redundancy pay uses your base rate for ordinary hours, but unused annual leave is paid at your full rate, often including leave loading. Long service leave uses your ordinary pay under state law. Check each part on your final payslip.
Tip 3: Plan before the money arrives
A payout can feel like a windfall, but it may need to last until your next job. Work out how many weeks of expenses it covers, check how it affects any Centrelink payments, and consider paying down high-interest debt before spending on anything else.
Redundancy pay FAQs
Definitions and eligibility
Q1. How much redundancy pay am I entitled to?
Under the National Employment Standards, it depends on your years of continuous service: 4 weeks for 1 to under 2 years, rising to 16 weeks for 9 to under 10 years, then 12 weeks for 10 years or more. Your award, enterprise agreement or contract may give more.
Q2. Who is not entitled to NES redundancy pay?
Employees of small businesses with fewer than 15 employees, casual employees, employees on fixed-term or task contracts, apprentices and trainees, employees with less than 1 year of service, and employees dismissed for serious misconduct. An award, agreement or contract can still give redundancy pay to some of these employees.
Q3. What is a genuine redundancy?
Under the Fair Work Act, a redundancy is genuine if the employer no longer needs anyone to do your job because of operational changes, has followed any consultation requirements in your award or agreement, and could not reasonably redeploy you. For tax, the ATO has its own test for the tax-free amount.
Q4. What notice do I get if I am made redundant?
At least 1 week for up to 1 year of service, 2 weeks for 1 to 3 years, 3 weeks for 3 to 5 years, and 4 weeks for more than 5 years, plus 1 week if you are over 45 and have at least 2 years of service. Your employer can pay this instead of having you work it.
Maths and technical rules
Q5. How is redundancy pay calculated?
Multiply your base weekly pay for ordinary hours by the number of weeks for your service. Base pay excludes overtime, penalty rates, loadings, allowances and bonuses. Six years of service at $1,800 a week gives 11 weeks, or $19,800.
Q6. How much of my redundancy is tax-free?
For a genuine redundancy in 2026–27, the first $13,598 plus $6,801 for each complete year of service is tax-free. With 6 complete years, that is $54,404. Only complete years count. Amounts above the limit are taxed as an employment termination payment.
Q7. How is the rest taxed?
The part above the tax-free limit is an employment termination payment (ETP). Up to the ETP cap of $270,000 in 2026–27, it is taxed at no more than 32% including the Medicare levy if you are under 60, or 17% if you are 60 or older. Amounts above the cap are taxed at 47%.
Q8. How is unused leave taxed on redundancy?
Unused annual leave and unused long service leave relating to service after 17 August 1993 are taxed at no more than 32% including Medicare when paid because of a genuine redundancy. If the redundancy is not genuine, they are taxed at your marginal rate.
State and territory differences
Q9. Is redundancy pay the same in every state?
Yes for NES redundancy pay, because the National Employment Standards apply across Australia to most employees. Some state public sector employees are covered by state awards or policies that give different amounts.
Q10. Does long service leave on redundancy depend on my state?
Yes. Long service leave comes from state and territory laws. Redundancy is a qualifying reason for pro rata long service leave in every state, usually from 7 years of service, or 5 years in NSW and the ACT.
Q11. Do state public servants get more redundancy pay?
Often. Many state and federal public sector agreements and policies give 2 or 3 weeks per year of service, with a minimum and maximum. Check your agreement or your agency’s policy.
Q12. Does payroll tax affect my redundancy?
Payroll tax is paid by employers and does not reduce your payment.
Edge cases and ATO compliance
Q13. Can I put my redundancy payment into super?
Not as a rollover. Since 1 July 2007, ETPs cannot be rolled into super. You can make a personal contribution from the money, which counts towards the contribution caps, and you may be able to claim a deduction for a concessional contribution.
Q14. Is super paid on redundancy pay?
No. Redundancy pay and pay in lieu of notice are not ordinary time earnings, so super guarantee is not payable on them. Super is payable on your normal pay up to your last day.
Q15. Can my employer reduce my redundancy pay?
Only in limited cases. The Fair Work Commission can reduce NES redundancy pay if the employer finds you other acceptable employment, or if the employer cannot afford to pay. An employer cannot simply decide to pay less.
Q16. Does a redundancy payment affect Centrelink?
It can. Leave and some other termination payments can lead to an income maintenance period before payments start, and a large amount in the bank can trigger the liquid assets waiting period. Services Australia can tell you how your payout will be treated.
Related calculators
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Pro rata long service leave by state.
Open calculator →Updated 2026–27Annual leave accrued and leave loading.
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How long your payout could last between jobs.
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Open calculator →Editorial transparency and sources
We check the tax-free limits and ETP caps on this page against the ATO each year when they are indexed, and the NES redundancy and notice rules against the Fair Work Ombudsman. The 2026–27 limits of $13,598 plus $6,801 per year and the $270,000 ETP cap are from the ATO’s table of employment termination payment rates. The page was last checked on 29 October 2026. Read our editorial policy and report errors on our contact page.
General Advice Warning: this calculator and page provide general information for educational purposes only. They are not legal, tax or financial advice. Your entitlements depend on the NES, your award, enterprise agreement or contract, and state long service leave law. Tax shown uses the maximum rates for each component. Speak to the Fair Work Ombudsman, a registered tax agent or a licensed financial adviser before making decisions. AUFinanceCalculators.com does not hold an Australian Financial Services Licence and is not a registered tax agent. See our full disclaimer.