Redundancy Pay Calculator
Calculate your minimum redundancy entitlements based on your years of continuous service under the Fair Work Act.
Disclaimer
This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.
Frequently Asked Questions
Who qualifies for redundancy pay?
Is redundancy pay taxed in Australia?
What is Redundancy Pay?
Redundancy pay (also called severance pay) is a lump sum payment made to employees who lose their job because their position is no longer needed. Minimum entitlements are set by the Fair Work Act.
How this calculator works
The calculator uses the National Employment Standards (NES) minimum redundancy pay scale, which ranges from 4 weeks' pay (1-2 years of service) up to 16 weeks' pay (9-10 years). It also calculates your minimum notice period (1-4 weeks depending on service length, plus an extra week if you're over 45). Unused annual leave and long service leave are added to the total payout. These are minimum legal entitlements — your employer, award, or contract may provide more generous terms.
What Is Genuine Redundancy?
A genuine redundancy occurs when an employer no longer needs anyone to do the employee's job — the position itself is eliminated. This can happen because of business restructure, downsizing, closure, or a merger. The employer must follow proper consultation processes set out in the relevant award or enterprise agreement. If the employer could have reasonably redeployed you in another role, the redundancy may not be genuine.
Genuine vs Non-Genuine Redundancy — Tax Treatment
The distinction matters significantly for tax. A genuine redundancy payment up to a tax-free limit is not taxed at all. For 2025-26, the tax-free amount is a base limit (approximately $12,524) plus a per-year-of-service amount (approximately $6,264 per completed year). Any amount above the tax-free limit is taxed as an Employment Termination Payment (ETP) with concessional rates up to the ETP cap. A non-genuine redundancy (e.g., if the position is refilled) is taxed as normal income.
NES Minimum Entitlements
Under the Fair Work Act, when an employee is made redundant they are entitled to: redundancy pay based on years of continuous service, a minimum notice period (or payment in lieu of notice), payment for any accrued but untaken annual leave (including leave loading if applicable), and any accrued long service leave. These are minimum entitlements — your award, enterprise agreement, or employment contract may provide more.
Small Business Exemption
Employers with fewer than 15 employees (small businesses) are exempt from paying redundancy pay under the NES. However, they must still provide the minimum notice period, pay out accrued leave, and follow any redundancy provisions in the applicable award or enterprise agreement. The employee count is based on headcount at the time of giving notice, including casual employees engaged on a regular and systematic basis.
Fair Work Act — Minimum Redundancy Pay Scale
| Less than 1 year | Nil |
| 1 year - less than 2 years | 4 weeks |
| 2 years - less than 3 years | 6 weeks |
| 3 years - less than 4 years | 7 weeks |
| 4 years - less than 5 years | 8 weeks |
| 5 years - less than 6 years | 10 weeks |
| 6 years - less than 7 years | 11 weeks |
| 7 years - less than 8 years | 13 weeks |
| 8 years - less than 9 years | 14 weeks |
| 9 years - less than 10 years | 16 weeks |
| 10 years and over | 12 weeks |
Redundancy pay decreases from 16 weeks to 12 weeks after 10 years of service under the NES. Your award or agreement may provide more generous terms. Small businesses (<15 employees) are exempt from NES redundancy pay.
Minimum Notice Period
| Up to 1 year of service | 1 week |
| 1 year - 3 years | 2 weeks |
| 3 years - 5 years | 3 weeks |
| 5 years and over | 4 weeks |
| Employee aged 45+ with 2+ years service | Add 1 extra week |
Worked Examples
$85,000 salary, 5 years of continuous service, aged under 45
Total minimum payout: approximately $22,865 (redundancy $16,346 + notice $3,269 + leave entitlements)
- Calculate weekly pay: $85,000 / 52 = $1,634.62
- Redundancy pay for 5 years service: 10 weeks = $16,346
- Minimum notice period (3-5 years service): 3 weeks = $4,904
- Notice can be worked or paid in lieu — if paid: add $4,904
- Add any accrued annual leave and long service leave on top
- Genuine redundancy tax-free limit: ~$12,524 + (5 x $6,264) = ~$43,844 — entire redundancy amount is tax-free
$120,000 salary, 3 years of continuous service, aged 47
Total minimum payout: approximately $20,769 (redundancy $13,846 + notice $6,923)
- Calculate weekly pay: $120,000 / 52 = $2,307.69
- Redundancy pay for 3 years service: 6 weeks = $13,846
- Minimum notice period (3-5 years service): 3 weeks = $6,923
- Employee is over 45 with 2+ years service: add 1 extra week notice = $2,308
- Total notice: 4 weeks = $9,231
- Add any accrued annual leave and long service leave on top
All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.
Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.