Redundancy Payout Calculator

NES redundancy pay

A genuine redundancy happens when an employer no longer needs the job to be done by anyone and has consulted as required. Under the National Employment Standards, an eligible employee is entitled to redundancy pay based on completed years of continuous service. The amount is paid at the base rate of pay for ordinary hours.

Redundancy pay = weeks from the NES table × ordinary weekly pay. The table uses completed years of service.

• 1 to under 2 years: 4 weeks
• 2 to under 3 years: 6 weeks
• 3 to under 4 years: 7 weeks
• 4 to under 5 years: 8 weeks
• 5 to under 6 years: 10 weeks
• 6 to under 7 years: 11 weeks
• 7 to under 8 years: 13 weeks
• 8 to under 9 years: 14 weeks
• 9 to under 10 years: 16 weeks
• 10 years or more: 12 weeks

The drop at 10 years is deliberate: long service leave becomes available at that point, so the NES redundancy scale reduces. An award or enterprise agreement may provide a more generous scale, and some agreements preserve the higher amount beyond 10 years.

Employees are not entitled to redundancy pay if they have less than 12 months of service, are casual, are terminated for serious misconduct, or are a seasonal, contract or apprentice employee in specified circumstances. The small business exemption is covered below.

Tax on a redundancy

A genuine redundancy payment is split into a tax-free component and a taxable component. The tax-free component is the base amount plus a set amount for each completed year of service, capped at the size of the payment. For 2026–27 the base amount is $13,598 and the per-year amount is $6,801.

Everything above the tax-free component is an employment termination payment. The portion within the ETP cap of $270,000 is taxed at 32% if you are under preservation age, or 17% if you are at or over it. The excess above the cap is taxed at 47%. These rates apply instead of your marginal rate, which is why a redundancy can be taxed more lightly than ordinary salary.

The tax-free amount is not indexed to your salary. A higher earner with the same service gets the same tax-free limit, so a larger share of their payment is taxable. The calculator shows the split and the estimated tax, but your employer will withhold tax according to the ATO’s withholding rules.

To see how the payment fits with the rest of your income, use the tax return calculator or thebonus tax calculator.

Small business exemption

An employer with fewer than 15 employees is generally exempt from paying NES redundancy pay. The count includes the employer and any associated entities, and casual employees are not counted unless they are regular and systematic. If the exemption applies, the NES redundancy pay is zero.

The exemption does not remove everything. The employer still has to give notice or pay in lieu, pay accrued annual leave and any long service leave due, and meet any award or contractual obligation. Some awards require redundancy pay even for small businesses, so check the applicable instrument.

The toggle in the calculator sets the redundancy pay to zero so you can see the effect. It does not change the tax-free limit calculation, which is shown for reference, and it does not include leave or notice payments.

Other entitlements

Redundancy pay is only one part of a termination. Accrued annual leave is paid out at base rate and is taxed as ordinary income. Long service leave may be paid pro rata or in full depending on the state and your years of service. Notice, or payment in lieu, is separate again.

Some employees also receive ex gratia payments, retention payments or outplacement support. These can have different tax treatment, and an ex gratia payment that is not a genuine redundancy may not qualify for the tax-free component. Ask your employer to itemise the payment before you sign anything.

Use the annual leave calculator and thelong service leave calculator to estimate those separate amounts, then add them to the net redundancy figure.