Is redundancy pay taxed?

Genuine redundancy payments have a tax-free component that varies by age and years of service. Amounts above the tax-free limit are taxed at concessional rates.

What's the difference between redundancy and termination?

Redundancy occurs when the job itself is no longer needed. Termination can happen for various reasons including performance. Only genuine redundancy attracts special tax treatment.

Can my employer avoid paying redundancy?

Small businesses are exempt. Employers may also apply to the Fair Work Commission to reduce redundancy pay if they can't afford it or if they find you suitable alternative employment.

Redundancy Pay Calculator

Estimate your redundancy pay under the National Employment Standards (NES)

Based on years of continuous service and your weekly base rate of pay. Fair Work rules.

Employment Details

Enter your continuous service and base rate of pay. Redundancy pay is based on NES.

Years of continuous service

You need at least 12 months of continuous service to be entitled to NES redundancy pay.

Weekly base rate of pay ($)

Your base rate for ordinary hours (before overtime or penalties). Use your gross weekly pay if you work standard hours.

My employer is a small business (fewer than 15 employees)

Small business employers are not required to pay NES redundancy pay.

Your Redundancy Pay Estimate

Based on National Employment Standards (NES)

Weeks of pay7 weeks

Gross redundancy pay$10,500

This is an estimate. Your actual entitlement may depend on your award, agreement or contract. Redundancy pay may be taxed; see the ATO on leaving your job. For official guidance use the Fair Work Notice & Redundancy Calculator.

How to Use This Calculator

1Enter your years of continuous service with your employer
2Enter your weekly base rate of pay (excluding overtime, bonuses, allowances)
3Indicate if your employer is a small business (fewer than 15 employees)
4See your estimated redundancy pay entitlement under the NES

What Is Redundancy Pay?

Redundancy pay (also called severance pay) is a lump sum paid to employees whose job is no longer required. Under the National Employment Standards (NES), eligible employees receive between 4 and 16 weeks' pay depending on their length of service.

Redundancy occurs when an employer decides a job no longer needs to be done by anyone, usually due to business changes, restructuring or economic conditions. It's not the same as being fired for performance.

NES Redundancy Entitlements