An APS employee who accepts a voluntary redundancy (the agreements call it voluntary retrenchment) is usually paid 2 weeks' salary for each completed year of continuous service, plus a pro rata amount for extra months, with a minimum of 4 weeks and a maximum of 48 weeks. On top of that come notice or pay in lieu, unused annual leave and, in most cases, long service leave.
These rules come from each agency's own enterprise agreement, so check yours. This guide uses the Services Australia Enterprise Agreement 2024-2027 as the worked case. For voluntary redundancy outside the public service, see our general voluntary redundancy guide.
Key takeaways
- Formula: 2 weeks' salary per completed year of continuous service, plus completed months pro rata. Minimum 4 weeks, maximum 48 weeks (reached at 24 years).
- 4 week consideration period after you are invited to elect, and only one invitation.
- Notice: 4 weeks, or 5 weeks if you are over 45 with at least 5 years of continuous service, paid in lieu if you go early.
- Say no and you get a retention period of 7 months, or 13 months with 20 years' service or over age 45, less your NES redundancy weeks.
- Tax-free up to $13,598 plus $6,801 per complete year of service in 2026-27, for a genuine redundancy.
Who this covers
Redundancy terms for APS employees sit in each agency's enterprise agreement. The 2023 to 2024 service-wide bargaining round set common conditions for many topics, but redundancy was left out: agencies kept their existing redeployment, retraining and redundancy clauses. So the amounts can differ between agencies.
The Services Australia agreement covers everyone employed by the agency under the Public Service Act except Senior Executive Service employees and Medical Officers at levels 2 to 4. Its excess employee clauses do not apply to employees on probation, casuals or non-ongoing employees. The agreement nominally expires on 28 February 2027.
The APSC's own agreement uses the same 2 weeks per year with a 4 week minimum and 48 week maximum, but pays up to $900 for financial advice and career counselling where Services Australia pays up to $604 for financial advice. Small differences like this are why you should read the clause in your own agreement.
APSC, APS Bargaining Statement of Common Conditions (30 November 2023): "Redeployment, retraining, redundancy (RRR) including the amount of payments and retention period is quarantined for a future bargaining round." "Agencies will retain existing conditions related to RRR."
Services Australia Enterprise Agreement 2024-2027, A2.1(b): "all employees in the agency employed under the PS Act other than: (i) Senior Executive Service employees or equivalent; and (ii) employees with the classification of Medical Officer 2, Medical Officer 3 or Medical Officer 4". L3.1: "Clauses relating to the management of excess employees will not apply to employees on probation, casual or non-ongoing employees." A3.2: "This Agreement will nominally expire on 28 February 2027."
APSC Enterprise Agreement 2024-2027, cl 433: "An excess employee invited to accept voluntary retrenchment will be provided with assistance up to a total of $900 for financial advice and career counselling." Retrieved 10 November 2026.
How the offer works
Under the Services Australia agreement, a voluntary redundancy follows these steps:
- Redeployment first. The agency must look for redeployment options before anyone can be declared excess.
- Consultation of at least 4 weeks with employees likely to become excess, about avoiding it, redeployment and the possibility of a redundancy benefit. It can be shorter only with your written agreement.
- Written decision that you are excess, with an invitation to elect for retrenchment and information on your entitlements, super options and tax. The agency reimburses up to $604 for financial advice.
- 4 week consideration period to give your answer. If you elect to go, notice of termination cannot be given before the period ends unless you agree.
- Only one invitation. If you turn it down, you move to the retention period below.
The agency can also invite staff who are not excess to express interest in voluntary retrenchment where that would let an excess employee be redeployed, and an employee likely to become excess can ask for a job swap with someone who wants to go. For the general consultation rules, see redundancy consultation.
Services Australia Enterprise Agreement 2024-2027, L4.4: "An employee cannot be declared excess unless the agency has actively explored redeployment opportunities." L5.2: "This consultation period will extend for at least a 4-week period but may be reduced with the written agreement of the affected employee(s)." L5.3: "The Agency Head may invite other employees who are not excess to express an interest in voluntary retrenchment under clause L6, where that arrangement would allow the redeployment of the excess employee(s)." L6.1(c): "reimburse the employee up to $604 for expenses incurred in seeking financial advice." L6.2: "the employee will have 4 weeks in which to notify the Agency Head of their decision (the consideration period)." L6.4: "Only one invitation to elect for retrenchment with the payment of a redundancy benefit will be made to an excess employee." Retrieved 10 November 2026.
The redundancy benefit formula
Redundancy benefit = 2 weeks' salary x completed years of continuous service, plus 2 weeks x (completed months / 12) for the part year. The result is at least 4 weeks and at most 48 weeks, and never less than your NES redundancy pay.
"Salary" for this purpose includes:
- your salary at your substantive (ongoing) classification;
- salary at a higher classification, if you have acted at that level continuously for at least 12 months immediately before notice of termination;
- allowances in the nature of salary that are paid during annual leave and on a regular basis (not expense reimbursements);
- shift penalties, where they apply.
If you have worked part-time and have less than 24 years of full-time service, the 2 weeks for each part-time period is scaled to the hours you worked then.
Weeks of salary by length of service, and the value at the top of the APS 6 band ($113,242):
| Completed years of service | Weeks of salary | APS 6 top of band |
|---|---|---|
| 1 | 4 (minimum) | $8,687 |
| 2 | 4 | $8,687 |
| 3 | 6 | $13,031 |
| 5 | 10 | $21,718 |
| 10 | 20 | $43,435 |
| 15 | 30 | $65,153 |
| 20 | 40 | $86,871 |
| 24 | 48 | $104,245 |
| 30 | 48 (maximum) | $104,245 |
Dollar figures divide the annual salary by 52.14 (365 days / 7). The agreement does not set a weekly divisor in its text, so your payroll figure may differ by a few dollars. The redundancy calculator gives the NES minimum, which this benefit cannot fall below.
Services Australia Enterprise Agreement 2024-2027, L7.1: the employee "is entitled to payment of a redundancy benefit of an amount equal to 2 weeks’ salary for each completed year of continuous service, plus a pro rata amount for completed months of service since the last completed year of service, subject to any minimum amount the employee is entitled to under the NES." L7.2: "The minimum sum payable under this clause L7 will be 4 weeks’ salary, and the maximum sum will be 48 weeks’ salary." L8.1(b): "where the employee has been working at the higher level for a continuous period of at least 12 months immediately preceding the date on which the employee is given notice of termination of employment". L8.1(c): "other allowances in the nature of salary which are paid during periods of annual leave and on a regular basis". L8.1(d): "shift penalties, where applicable." L7.3: pro rata "for any period where an employee has worked part-time hours during their period of service and the employee has less than 24 years of" full-time service. Table C1, salary bands from 12 March 2026: APS 6 maximum $113,242. Retrieved 10 November 2026.
What counts as service
Service for the redundancy benefit includes:
- service in any APS agency;
- government service as defined in section 10 of the Long Service Leave (Commonwealth Employees) Act 1976, and other Commonwealth service recognised for long service leave;
- service with the Australian Defence Force;
- service with another organisation where a function recognised for long service leave was transferred into or out of the APS.
Earlier service only counts if there was no break, except a break of less than 4 weeks where you accepted the new job before leaving the old one. Service does not count if it ended with a redundancy benefit or employer-funded retirement benefit, so a past APS payout resets the count. Absences that do not count as service for leave do not count either.
Services Australia Enterprise Agreement 2024-2027, L12.1: "service in an APS agency;" "government service as defined in section 10 of the Long Service Leave (Commonwealth Employees) Act 1976;" "service with the Australian Defence Forces;". L12.2(a): "the break in service is less than 4 weeks, and occurs where an offer of employment with the new employer was made and accepted by the employee before ceasing employment with the preceding employer". L12.3(d): "the payment of a redundancy benefit or similar payment or an employer-financed retirement benefit". L12.1(c): "service with the Commonwealth, which is recognised for long service leave purposes". L12.4: "Absences from work that do not count as service for leave purposes will not count as service for redundancy pay purposes." Retrieved 10 November 2026.
Notice and pay in lieu
Once you elect to go, the agency gives written notice of termination of 4 weeks, or 5 weeks if you are over 45 with at least 5 years of continuous service. If your employment ends at the start of or during the notice period, you are paid in lieu of the rest of it.
If you agree to cut the 4 week consideration period short, you are also paid the unexpired part of the consideration period when you leave. More on how pay in lieu works is in payment in lieu of notice.
Services Australia Enterprise Agreement 2024-2027, L9.1: written notice "of 4 weeks (or 5 weeks for an employee who is over 45 with at least 5 years of continuous service)." L9.2: "the employee will receive payment in lieu of notice for the unexpired portion of the notice period." L6.3: "Where the period is reduced, the employee will, on termination of employment, be paid the unexpired period of the consideration period." Retrieved 10 November 2026.
If you say no: the retention period
If you do not accept the redundancy benefit, you keep your job for a retention period that starts on the day you were told in writing that you are excess:
- 13 months if you have 20 years or more of service or are over 45;
- 7 months for everyone else.
The period is cut by the number of weeks of NES redundancy pay you would be entitled to. During it the agency keeps looking for a job for you and can move you to a lower classification on 4 weeks' notice, with your old salary maintained for the rest of the period. At the end, the agency can terminate your employment without your consent.
Services Australia Enterprise Agreement 2024-2027, L10.1: "13 months where the employee has 20 years or more service or is over 45 years of age; or (b) 7 months for all other employees." L10.2: "the relevant period in subclause L10.1 will be reduced by the number of weeks of redundancy pay that the employee will be entitled to under the NES". L10.3: "The retention period will commence on the day the Agency Head advised the employee in writing that they are an excess employee." L10.4(b): "may, with 4 weeks’ notice, reassign the excess employee to duties at a lower APS classification." L10.5: "the employee will receive income maintenance to maintain salary at the previous higher classification for the balance of the retention period." L11.1: "the Agency Head may terminate the employment of the excess employee, without the employee’s consent, at the end of the retention period." Retrieved 10 November 2026.
Worked example
An APS 6 at Services Australia on $113,242, aged 50, with 14 years 7 months of continuous full-time service, all with the agency. They accept the offer and are paid in lieu of the whole notice period.
- Weekly salary: $113,242 / 52.14 = $2171.76
- Weeks: 2 x 14 + 2 x 7/12 = 29.17 weeks
- Redundancy benefit: 29.17 x $2171.76 = $63,343
- Pay in lieu of notice: 5 weeks (over 45, 5+ years) = $10,859
- 2026-27 tax-free limit: $13,598 + 14 x $6,801 = $108,812
The benefit and pay in lieu total $74,202, which is under the $108,812 limit, so none of it is taxed if the ATO treats it as a genuine redundancy. Unused annual leave and long service leave are paid on top and taxed separately.
Tax and the 2026-27 tax-free limit
For 2026-27, a genuine redundancy payment is tax-free up to $13,598 plus $6,801 for each complete year of service. The tax-free part can include the severance payment and pay in lieu of notice. Anything above the limit is taxed as an employment termination payment (ETP): the ETP tax calculator works out that tax, and how redundancy pay is taxed explains the rates.
To be genuine, you must be under age pension age and your job must be abolished. The ATO lists "leaving voluntarily" as non-genuine, but says a redundancy is still genuine where the employer asks for expressions of interest before deciding who to dismiss. Under the APS agreements the Agency Head decides you are excess and terminates your employment after you elect to go. The Fair Work side of the test is in genuine redundancy.
Unused annual leave, leave loading and long service leave paid out on termination are excluded from the genuine redundancy payment and taxed under their own rules: see tax on annual leave payouts and the long service leave tax calculator.
ATO, Key super rates and thresholds: Employment termination payments (last updated 17 April 2026), Table 20: "Income year | Base limit | For each complete year of service", "2026-27 | $13,598 | $6,801".
ATO, Genuine redundancy payments (QC27128, last updated 5 June 2026): "A genuine redundancy payment is a payment made to you as an employee if your job is abolished and you no longer have a job and you are under aged pension age." Amounts that may be included: "payment in lieu of notice", "severance payment of a number of weeks' pay for each year of service". Amounts to exclude: "lump sum payments of unused annual leave or leave loading paid on termination of employment", "lump sum payments of unused long service leave paid on termination of employment under a formal arrangement". "Any amount over the tax-free limit is part of your ETP."
ATO, Redundancy and early retirement (last updated 24 July 2025): "A redundancy is still considered genuine if the employer seeks expressions of interest from their employees before they decide which employee to dismiss." Retrieved 10 November 2026.
Annual leave and long service leave
Annual leave: unused annual leave is paid out at your final salary, including allowances that would have been paid during annual leave. The annual leave payout calculator works out the gross amount.
Long service leave for APS employees comes from the Long Service Leave (Commonwealth Employees) Act 1976. With 10 years or more of service, your credit is paid out however you leave. With at least 1 year but under 10 years, it is paid out only in some cases, including retrenchment. The Act defines retrenchment as a compulsory termination because your position is not necessary or the work has reduced. Under the agreement a voluntary redundancy is a termination by the Agency Head because you are excess, but confirm with your agency that it treats your exit as a retrenchment if you have under 10 years. The payout uses your full salary rate on your last day. The Commonwealth long service leave calculator works out the credit and payout.
Services Australia Enterprise Agreement 2024-2027, G37.2: "An employee who separates from the APS (other than by death) will be paid in lieu of any unused annual leave. Payment will be made using the rate of the employee’s final salary, including allowances that would have been included in the employee’s salary during periods of annual leave." G37.3: "Long service leave will be paid out on separation only in accordance with the Long Service Leave Act 1976."
Long Service Leave (Commonwealth Employees) Act 1976 (AustLII consolidation): s 16(4), "where an employee whose period of service is at least 10 years ceases to be an employee otherwise than by death, the approving authority shall authorize payment"; s 17(2), "where an employee whose period of service is less than 10 years but not less than 1 year" ... "(b) ceases to be an employee by reason of his or her retrenchment"; s 4(1), "retrenchment" means "the compulsory termination of the service of the employee for the reason that: (a) his or her service or position is not necessary; (b) the work for which he or she was engaged is finished; or (c) a reduction in the number of employees is necessary because the quantity of work has diminished."; s 21(1), the rate "is the rate at which full salary would be payable to him or her in respect of his or her employment on the day on which he or she ceases to be an employee". Retrieved 10 November 2026.
Services Australia figures and 2026 bargaining
Services Australia's 2025-26 annual report shows $4.397 million in separations and redundancies expense for 2025-26, up from $2.467 million in 2024-25. The report gives the dollar total. It does not give the number of staff who took a voluntary redundancy.
APS-wide bargaining for the next round of agreements began in July 2026 and covers more than 100 agencies. The Commonwealth has proposed, for the first time, a minimum set of APS-wide principles for redeployment, retraining and redundancy, including a common definition of an excess employee. These are proposals only, and the published summary does not mention changing the redundancy amounts or retention periods. Until a new agreement is approved, your current agreement's clause applies.
Services Australia, Annual Report 2025-26 (letter of transmittal dated 21 September 2026), note A1.1 Employee benefits, $'000: "Separations and redundancies 4,397 2,467" (2026, 2025).
APSC, APS bargaining (schedule last updated 18 September 2026): "Meeting 1 - Tue 21 July 2026"; "whole-of-APS bargaining covering more than 100 agencies and approximately 200,000 APS employees." APSC, Further key employment conditions: "The positions outlined on this page are proposals only and remain subject to ongoing bargaining." "The Chief Negotiator is proposing for the first time a minimum set of APS-wide principles for Redeployment, Retraining and Redundancy (RRR) to be incorporated into enterprise agreements." "The proposed principles introduce a common definition of excess employees for the purposes of redundancy to ensure excess employees are considered consistently across the APS." Retrieved 10 November 2026.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.