No super is payable on redundancy pay itself. Your employer must pay 12% super on wages to your last day and on any payment in lieu of notice, and it must reach your fund within 7 business days.
The redundancy pay is often the largest figure in the letter, and it is the one line that carries no super at all. This guide splits a worked 2026-27 package line by line, puts the super in dollars, gives the date it has to land, and then covers what you can and cannot do if you want part of the payout to end up in super anyway. The tax-free limit is a separate question, answered in how redundancy pay is taxed.
Key takeaways
- Redundancy pay attracts no super, whether it is the NES minimum or a larger package, and that includes the tax-free part.
- Wages to your last day and pay in lieu of notice do attract super: 12% on top, whatever the reason the job ended.
- In the ATO's own example, a $40,000 package carries $1,200 of super, all of it on the $10,000 notice payment.
- Since 1 July 2026, the super on a final pay must be received by your fund within 7 business days.
- You cannot roll a redundancy payment into super or salary sacrifice money already earned, but you can generally make a personal contribution from the cash within the 2026-27 caps: $32,500 concessional and $130,000 non-concessional.
Which parts of a redundancy package attract super
Since 1 July 2026 the question is whether a payment counts as qualifying earnings. For money paid because a job ends, the ATO's answer is short: notice pay counts, and nearly everything else in a redundancy package does not.
| Part of the package | Super guarantee? | Reason |
|---|---|---|
| Wages for hours worked up to your last day | Yes, 12% | Pay for ordinary hours of work |
| Payment in lieu of notice | Yes, 12% | Listed as qualifying earnings for every termination reason and every tax treatment |
| Notice you work out, or spend on gardening leave | Yes, 12% | Paid as ordinary wages, or as gardening leave, which the ATO lists separately |
| Redundancy pay at the NES scale or above, including the tax-free part | No | Compensates for losing the job rather than rewarding work |
| Ex gratia, severance, golden handshake or compensation for loss of job | No | Paid in consequence of the termination |
| Non-genuine redundancy payment | No | Paid in consequence of the termination |
| Unused annual leave, leave loading and long service leave | No | Unused leave paid on termination |
A final payslip can also carry personal leave paid out under a contract, rostered days off, overtime, commission and bonuses. Each of those is answered in super on termination payments, which goes through the whole final pay item by item. Whether leave loading is added to your unused annual leave in the first place is covered in leave loading on termination.
"The minimum super guarantee for your employees (including eligible contractors) is 12% of their qualifying earnings for the pay period." "Payments made in consequence of the termination of employment are generally not ordinary time earnings." Table 13 lists "Payment in lieu of notice, for all termination reasons. This applies regardless of the reason for termination or treatment for tax purposes." as qualifying earnings, and lists as not qualifying earnings "Unused leave on termination, including annual leave, annual leave loading and long service leave" and "Other payments in consequence of the termination of employment, such as: a gratuity or golden handshake; genuine redundancy or early retirement scheme payments above the tax-free limit; severance pay; non-genuine redundancy; compensation for loss of job". Table 2 lists "Gardening leave" as qualifying earnings. ato.gov.au, retrieved 6 to 7 October 2026.
Draft LCR 2026/D1, paragraph 90: redundancy payments "are payments to compensate the employee for the loss of their job; not a reward for their services. They are not qualifying earnings." The ruling is still a draft; the ATO's Table 13 is its current published position.
The ATO's own example
The ATO's qualifying earnings guidance prices a redundancy package in dollars. It is the plainest official statement of the split, so it is worth reading in the ATO's own words.
"Michael's job is no longer required to be performed. His job is now redundant, and after consulting with Michael, his employer pays him a genuine redundancy on 14 October 2026. It totals $40,000 and comprises: payment of $10,000 in lieu of notice for 4 weeks of wages; redundancy payment of $25,000; ex-gratia payment of $5,000. Out of the total payment of $40,000 only the $10,000 payment in lieu of notice is qualifying earnings." The super owed is $10,000 x 12% = $1,200.
Source: ATO, What payments are qualifying earnings, Example 7, last updated 2 September 2026.
Michael's notice pay is a quarter of his package, so a quarter of it attracts super. The $30,000 of redundancy and ex gratia pay carries none, even though the redundancy was genuine and his employer consulted him first. Whether your employer has to consult you before a redundancy is covered in redundancy consultation.
Worked example: Dana's 2026-27 package
Dana is 48 and has 9 completed years with an employer of 200 staff. Her role is abolished, her notice is paid out instead of worked, and her final pay goes in on Friday 16 October 2026. Her base rate is $1,850 a week for 38 ordinary hours with no penalties, so her full rate and her base rate are the same.
| Line | Working | Amount | Super? |
|---|---|---|---|
| Wages owed to her last day | 2 weeks of ordinary hours | $3,700.00 | Yes |
| Payment in lieu of notice | 4 weeks for more than 5 years, plus 1 week for being over 45 with at least 2 years: 5 x $1,850 | $9,250.00 | Yes |
| Redundancy pay | 16 weeks for 9 to under 10 years: 16 x $1,850 | $29,600.00 | No |
| Unused annual leave | 120 hours x $48.68 | $5,842.11 | No |
| Leave loading, where the award provides 17.5% | 17.5% x $5,842.11 | $1,022.37 | No |
| Qualifying earnings | $3,700 + $9,250 | $12,950.00 | |
| Super guarantee | 12% x $12,950 | $1,554.00 | Due by Tuesday 27 October 2026 |
Only 26.2% of Dana's $49,414.48 final pay attracts super. Her notice pay works harder on the tax side, though. The ATO says a genuine redundancy payment can include a payment in lieu of notice, so that $9,250 can carry super and still fall inside her 2026-27 tax-free limit of $74,807. The tax workings belong to how redundancy pay is taxed, and whether her redundancy counts as genuine to begin with is covered in genuine redundancy. If you volunteered, whether it still counts as genuine for tax is covered in voluntary redundancy.
Fair Work Ombudsman, Notice of termination and redundancy pay (content last updated 16 January 2026): notice "More than 5 years | 4 weeks"; "Employees over 45 years old who have completed at least 2 years of service when they receive notice are given an additional week of notice." Redundancy "At least 9 years but less than 10 years | 16 weeks". ATO, Key super rates and thresholds: Employment termination payments (last updated 17 April 2026) for the 2026-27 tax-free limit. ATO, Genuine redundancy payments (last updated 5 June 2026): a genuine redundancy payment may include "payment in lieu of notice". Wage inputs are illustrative.
The redundancy calculator works out your NES redundancy pay from your weekly pay and service. Add 12% of your final wages and any notice paid in lieu to see the super your employer owes on top.
Notice pay: why it is the exception
Redundancy pay compensates you for losing the job. Notice pay stands in for wages you would have earned during the notice period, and the ATO counts it as qualifying earnings for every reason a job ends and however it is taxed. Three things follow.
- Worked, paid out or spent on gardening leave, the answer is the same. Notice you work is ordinary pay, gardening leave is qualifying earnings in its own right, and so is a payment in lieu. Swapping one for another does not remove the super.
- Pay in lieu uses your full rate, redundancy pay uses your base rate. The Fair Work Ombudsman says notice paid in lieu is paid at your full pay rate, which takes in loadings, monetary allowances, penalty rates and incentive payments. Redundancy pay is paid at your base rate for ordinary hours. A week of notice can therefore be worth more than a week of redundancy pay, and the super follows the notice.
- The extra week for over-45s attracts super too. If you are over 45 with at least 2 years of service, your minimum notice goes up by a week. Your redundancy pay does not change with age.
How the notice payment itself is worked out is covered in payment in lieu of notice.
When your employer must pay it
Payday Super began on 1 July 2026 and applies to any final pay made since, even when the work it pays for was done before that date. Quarterly super does not apply to a redundancy paid now; final pays made up to 30 June 2026 stay under the old quarterly rules.
The contribution is only on time if your fund receives it, with the details it needs to credit your account, within 7 business days after you are paid. Saturdays, Sundays and any public holiday that covers a whole state or territory do not count as business days, wherever in Australia that holiday falls.
Some payments made outside the normal pay cycle, such as bonuses and back pay, get a later deadline under legislative instrument LI 2026/20. On our reading of LI 2026/20, a final pay does not qualify: a payment is only out of cycle if a regular in-cycle pay follows it, and nothing follows a final pay. The 7 business days therefore run from the final pay itself.
For Dana, paid on Friday 16 October 2026, her fund must receive $1,554.00 by Tuesday 27 October 2026. No public holiday covering a whole state or territory falls between those dates.
"Your super guarantee contribution is on time if it is received by your employee's super fund (with all the necessary information to allocate the contribution to the employee's member account) within 7 business days after paying your employee." "A business day is any day other than: a Saturday or Sunday; a day that is a public holiday for the whole of any Australian state or territory." ato.gov.au.
LI 2026/20 (registered 24 June 2026), s 5(3): a payment "is not a payment of out-of-cycle qualifying earnings unless: (a) the employer makes another payment of qualifying earnings to or for the employee (the subsequent payment) following the first payment", that subsequent payment is itself in cycle, and it is made on the next scheduled day. LCR 2026/1 (published 5 August 2026), paragraph 8: the new Act covers payments on a QE day on or after 1 July 2026 "that relate to work, labour or performance of duties before, on or after 1 July 2026". Retrieved 6 to 7 October 2026.
Can you put your redundancy into super?
The redundancy letter rarely answers this. People ask about three routes, and only one of them works.
Rolling the payment over: not allowed
The taxable part of a redundancy package is an employment termination payment, and the ATO is direct: "You can't roll over your ETP to your superannuation." ETPs paid after 30 June 2007 cannot be contributed to or rolled over into super, apart from old transitional arrangements.
Salary sacrifice: only for pay not yet earned
An effective salary sacrifice arrangement must be in place before you do the work, and the ATO says it cannot cover pay, leave, bonuses or commission you accrued before the arrangement started. Leave built up before your redundancy was announced is already accrued, so it cannot be sacrificed. The ATO's rules make sacrificing the redundancy pay itself very hard, so get advice from your fund or a licensed adviser before relying on it.
An existing arrangement does not shrink the super guarantee on your final wages or notice pay: your employer must still pay the full guarantee as if no salary was sacrificed.
A personal contribution from the cash, within the 2026-27 caps
Once the payout is in your bank account, you can generally put some of it into super as a personal contribution. The ATO's bar is on rolling over or contributing the ETP itself, and the personal contribution rules we reviewed set no test about where the money came from. Confirm with your fund before you pay anything in.
| Type of contribution | 2026-27 cap | What else counts towards it |
|---|---|---|
| Concessional: a personal contribution you claim as a tax deduction | $32,500 | Your employer's super guarantee and any salary sacrifice in the same year |
| Non-concessional: no deduction claimed | $130,000 | Other after-tax contributions in the year |
To claim the deduction, give your fund a notice of intent in the approved form and get its acknowledgment, no later than the day you lodge your tax return for that year or the end of the following income year, whichever comes first. If your total super balance was under $500,000 on the previous 30 June, unused concessional cap from earlier years can be carried forward, with each unused amount available for up to 5 years.
ATO, Employment termination payments for employees (last updated 5 June 2026): "You can't roll over your ETP to your superannuation." ATO, Key super rates and thresholds: Employment termination payments: "Employment termination payments made after 30 June 2007 (other than those made under the transitional arrangements) cannot be contributed to or rolled over into super."
ATO, Salary sacrificing for employees (last updated 11 August 2026): "An effective salary sacrifice arrangement can't include salary and wages, leave entitlements, bonuses or commissions that you accrue before you enter an arrangement." "Your employer must still pay your full super guarantee entitlements as though there was no salary sacrifice."
ATO, Contributions caps (last updated 11 September 2026): "From 1 July 2026, the general concessional contributions cap is $32,500"; non-concessional cap "2026-27 | $130,000"; carry forward applies "if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year". ATO, Personal super contributions: "To claim a deduction for your personal super contributions, you must give your super fund a notice in the approved form and get an acknowledgment from the fund." Retrieved 6 to 7 October 2026.
If your employer goes under
If your employer becomes insolvent, do not expect the Fair Entitlements Guarantee to fill a gap in your super: the Fair Work Ombudsman says it does not include superannuation. Directors can face personal liability instead, because the ATO warns that director penalties can apply to unpaid super, even for amounts not yet due when the business closes.
Check your final contribution
- Count 7 business days from your final pay, then log in to your fund and match the contribution to 12% of the wages and notice pay on your final payslip.
- Read your award or enterprise agreement. The ATO notes an industrial instrument can require super on amounts that are not qualifying earnings, which could reach parts of the package the law alone does not.
- Keep the redundancy letter and final payslip. They show which dollars were paid as notice and which as redundancy pay, and that split decides the super.
Super on leave you take, or cash out while still employed, is a different question: see superannuation on annual leave. To total the whole last pay, use the final pay calculator, and for the tax on the taxable part, the ETP tax calculator.
Common questions
Is super payable on a genuine redundancy?
Not on the redundancy pay. Super is owed at 12% on the wages and any notice paid in lieu that come with it. Whether the redundancy is genuine or not makes no difference to that split.
What is included in a redundancy payout?
Usually wages owed to your last day, notice or pay in lieu, redundancy pay, and unused annual and long service leave. Only the first two attract super. The redundancy calculator works out the redundancy pay part.
Should payment in lieu of notice include super on top?
Yes. The super is 12% on top of the notice payment and goes to your fund, not out of the payment. In the ATO's example, $10,000 of notice pay carries $1,200 of super.
Do you get more redundancy if you are over 45?
Your redundancy pay does not change with age. Your minimum notice does: one extra week if you are over 45 with at least 2 years of service, and that week attracts super.
Can I salary sacrifice my redundancy payment into super?
Not anything you had already accrued before an arrangement started, such as leave built up over the years, and the taxable part of the package cannot be rolled into super either. Get advice before trying to sacrifice the redundancy pay itself.
Can I put my redundancy payout into super?
Generally yes, as a personal contribution from the cash once you have it, within the 2026-27 caps: $32,500 concessional if you claim a deduction, shared with your employer's contributions, or $130,000 non-concessional. Check with your fund first.
Does the tax-free part of my redundancy attract super?
No. Tax-free or taxable, redundancy pay compensates you for losing the job, and neither part is qualifying earnings.
My employer went into liquidation without paying my super. Does FEG cover it?
No. The Fair Entitlements Guarantee excludes superannuation. Directors can be personally liable for unpaid super under the ATO's director penalty rules.
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.