Redundancy Calculator Australia.
Calculate redundancy pay under section 119 of the Fair Work Act 2009 and the tax on it. NES scale of 4 to 16 weeks, the small business exemption, and the genuine redundancy tax-free limit.
Pop in your details
Here's your entitlement
See full calculation
| Component | Formula | Value |
|---|---|---|
| Years of continuous service | 2025-09-24 to 2026-09-24 | 1.00 yrs |
| Weekly base pay | 38h × $35.00 | $1330.00 |
| NES schedule (s.119) | Bracket: < 1 year (no entitlement) | 0 wks |
| Eligibility adjustment | Less than 1 year of continuous service. Redundancy pay only applies after 12 months under the NES. | −0 wks |
| Redundancy pay | 0 wks × $1330.00 | $0.00 |
Disclaimer: This tool does not constitute legal or financial advice. Results may be inaccurate due to changes in legislation or your circumstances. This tool does not constitute legal or financial advice. We do not recommend taking actions based solely on these results. The calculator makes assumptions and results may be inaccurate due to changes in legislation, modern awards, or your personal circumstances. You use this information at your own risk. We can't guarantee to be perfect, so do note you use the information at your own risk and we can't accept liability if things go wrong. For official guidance, visit Fair Work Ombudsman (fairwork.gov.au). Fair Work Ombudsman.
Three numbers that define this entitlement.
Every figure derived from current legislation.
How much redundancy pay do you get?
Redundancy pay under section 119 of the Fair Work Act 2009 runs on a sliding scale of completed continuous service, paid at your base rate of pay for ordinary hours. Base rate (s.16) excludes overtime, penalty rates, allowances, loadings and bonuses, so it is lower than the gross on your payslip.
| Continuous service | Redundancy pay |
|---|---|
| 1 year to under 2 | 4 weeks |
| 2 years to under 3 | 6 weeks |
| 3 years to under 4 | 7 weeks |
| 4 years to under 5 | 8 weeks |
| 5 years to under 6 | 10 weeks |
| 6 years to under 7 | 11 weeks |
| 7 years to under 8 | 13 weeks |
| 8 years to under 9 | 14 weeks |
| 9 years to under 10 | 16 weeks |
| 10 years or more | 12 weeks |
The scale peaks at 16 weeks for 9 to 10 years, then drops to 12 weeks at 10 years and over. That is deliberate. Fixing the scale in the Redundancy Case 2004, the Australian Industrial Relations Commission said at paragraph 154 that employees with 10 or more years already get a pro rata long service leave payout on redundancy, so counting the full 16 weeks too would be double counting. Under 12 months of service attracts nothing (s.121(1)(a)), and casual service does not count (s.119(3)).
That is the gross figure. Part of a genuine redundancy is tax free and the rest is an employment termination payment, so what lands in your account is lower: the redundancy tax calculator further down this page works out both.
The small business exemption: fewer than 15 employees
An employer with fewer than 15 employees pays no NES redundancy pay at all: s.121(1)(b) switches section 119 off for a small business employer, and section 23 sets the threshold. The headcount is wider than most people assume. Associated entities are treated as one employer (s.23(3)), and the total includes the employee being made redundant plus anyone else terminated at the same time (s.23(4)). Part-timers count as whole people, not fractions; casuals count only if they are regular casuals (s.23(2)(b)).
Two things get past it. If the employer goes bankrupt or into liquidation and only fell under 15 because of those terminations, redundancy pay is still owed (s.121(4)). And an award can override the exemption: the Joinery and Building Trades Award 2020 (cl.37.4) and the Timber Industry Award 2020 (cl.39.4) make small business employers pay on a scale capped at 8 weeks. Our small business redundancy guide walks through the count.
What makes a redundancy genuine?
Genuine redundancy means two different things, and passing one test is not passing the other. For unfair dismissal, section 389 needs all three limbs: the job is no longer required because of changes in operational requirements, the employer met any consultation obligation in your award or agreement, and redeployment inside the business or an associated entity would not have been reasonable. Miss one and it is not a genuine redundancy, and an unfair dismissal claim opens up.
The tax test is different. Section 83-175 of the Income Tax Assessment Act 1997 asks only that the position was genuinely redundant, that you were dismissed before pension age and at arm’s length, and that there was no arrangement to re-employ you. Consultation and redeployment are absent. So a redundancy can be handled badly enough to be unfair and still be taxed concessionally, and your section 119 pay is owed either way, because s.119(1) sets its own test. See how redundancy pay is taxed for the tax-free limit.
Redundancy pay and notice are separate entitlements
You get notice and redundancy pay, not one or the other. Notice under section 117 is 1 week up to a year of service, 2 weeks over 1 year, 3 weeks over 3 and 4 weeks over 5, plus an extra week if you are over 45 with at least 2 years of service. The two scales do not line up, so 4 years of service is 3 weeks of notice and 8 weeks of redundancy pay.
The rates differ too. Payment in lieu of notice is at your full rate of pay (s.117(2)(b), defined in s.18), which includes loadings, allowances, penalty rates and bonuses. Redundancy pay is at the narrower base rate. Read notice of termination and payment in lieu of notice, or total everything with the final pay calculator.
Redundancy by state, and the awards that replace the NES scale
The section 119 scale is federal and identical in New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the ACT and the Northern Territory. There is no state redundancy calculation. What changes by state is whether you are in the national system at all. Western Australia is the only state that has not referred its private sector industrial relations powers, so a WA employee of a sole trader, an unincorporated partnership or an unincorporated trust sits in the WA state system, whose severance scale repeats the same weeks but only bites at 15 or more employees. State and local government employees are a separate question again: the referring states kept their workplace relations powers over that group, so a council or state agency employee may sit outside the NES entirely. Check which system covers you before applying this scale.
Your award can replace the scale outright. Under s.123(4)(b) an industry-specific redundancy scheme in a modern award displaces the NES provisions entirely. The Building and Construction General On-site Award (cl.41) and the Plumbing and Fire Sprinklers Award (cl.34) pay from under 12 months of service but cap at 8 weeks from 4 years, half the NES peak, and neither carries a small business exemption. The Black Coal Mining Award (cl.34) pays 1 week per completed year, plus up to 30 weeks of retrenchment pay where the redundancy is caused by technological change, market forces or diminution of reserves; the Mining Industry Award, which excludes black coal, leaves the NES scale alone. Employer contributions to a redundancy fund are set off against the entitlement under the construction award (cl.41.4) and the Electrical Contracting Award (cl.31.6).
Redundancy pay and your final pay
Redundancy pay is only one part of what you are owed when a role is made redundant. Your final pay also includes outstanding wages, unused annual leave paid out under s.90, any long service leave, and notice or pay in lieu of notice. Add redundancy to those components to see the full figure.
Those parts are taxed under different rules. The severance itself is a genuine redundancy payment: part of it is tax free, and the excess is an employment termination payment taxed at a concessional rate up to the ETP cap. Unused annual leave and long service leave are excluded from the ETP definition by s 82-135 of the Income Tax Assessment Act 1997 and are taxed on a separate table, though they still count as taxable income when the whole-of-income cap is worked out. The redundancy tax calculator on this page splits them and applies the tax-free limit. If the payment is not a genuine redundancy at all, a golden handshake, a gratuity, pay in lieu of notice, an early retirement scheme or invalidity payment, or a settlement, there is no tax-free limit and a second cap can apply: use the ETP tax calculator for those.
Redundancy tax calculator: what you actually keep.
Part of a genuine redundancy payment is not taxed at all. The rest is an employment termination payment. Your unused leave is neither, and is taxed on its own line.
Your redundancy, after tax
Here's your entitlement
See full calculation
| Component | Formula | Value |
|---|---|---|
| Severance, Fair Work Act s.119 | 10 weeks at $1,500 base rate, 5 completed years | $15,000 |
| Tax-free limit, 5 completed years | $15,000 at Not assessable and not exempt | $0 |
| Unused annual leave (not an ETP) | $6,000 at Capped at 30% plus 2% Medicare | $1,920 |
| Total tax | $21,000 gross, blended rate 9.1% | $1,920 |
Disclaimer: This is an estimate of tax payable, not legal or financial advice, and it is not the PAYG figure your employer will withhold. It assumes the payment is a genuine redundancy payment within ITAA 1997 s 83-175, that you are an Australian resident for the full year, that you have given your employer a TFN, and that the whole payment falls in FY2026-27. It does not model notice or pay in lieu of notice, the Medicare levy reduction for low incomes, study and training loan repayments, or the Medicare levy surcharge. Check your own position with a registered tax agent or the ATO.
How much of a redundancy is tax free?
For FY2026-27 the genuine redundancy tax-free limit is $13,598 plus $6,801 for each completed year of service. That part is not assessable income and is not exempt income under section 83-170(2) of the Income Tax Assessment Act 1997, so no tax is withheld from it, it does not count towards the ETP cap, and it does not appear in the taxable income figure that matters elsewhere in the termination rules.
Only the excess above the limit is an employment termination payment. Years of service means whole years under s 83-170(3), so 4 years and 11 months counts as 4, and one more month of service would be worth $6,801 of tax-free limit. Both figures are indexed to average weekly ordinary time earnings and move on 1 July. They were $13,100 plus $6,552 in FY2025-26.
| Completed years of service | Redundancy pay, s.119 | Tax-free limit, FY2026-27 |
|---|---|---|
| 1 year | 4 weeks | $20,399 |
| 2 years | 6 weeks | $27,200 |
| 3 years | 7 weeks | $34,001 |
| 4 years | 8 weeks | $40,802 |
| 5 years | 10 weeks | $47,603 |
| 6 years | 11 weeks | $54,404 |
| 7 years | 13 weeks | $61,205 |
| 8 years | 14 weeks | $68,006 |
| 9 years | 16 weeks | $74,807 |
| 10 years | 12 weeks | $81,608 |
| 15 years | 12 weeks | $115,613 |
| 20 years | 12 weeks | $149,618 |
Weeks from Fair Work Act 2009 (Cth) s.119. Tax-free limit from ITAA 1997 s 83-170, with the FY2026-27 base and service amounts published in ATO Schedule 11 (QC107129, 17 June 2026) and the ATO key superannuation rates and thresholds page (QC18123, 17 April 2026). The two agree.
On the section 119 scale alone, most redundancies are entirely tax free. The weeks and the tax-free limit both climb with service, and the limit climbs faster. The closest the two ever come is at 2 completed years, where 6 weeks of pay meet a limit of $27,200. Even at that point the severance only becomes taxable once your base rate passes $4,533 a week, around $235,733 a year. So if your employer is paying the legal minimum and nothing more, expect the tax to land on your leave payout rather than on the severance. The redundancies that do produce an ETP almost always come from an award scheme, an enterprise agreement or a contract paying well above section 119.
The ATO's own worked example. Schedule 11 Example 4 takes a $48,000 genuine redundancy payment after 5 years of service. The tax-free limit is $13,598 plus 5 times $6,801, which is $47,603. That leaves $397 as the ETP. Put those figures into the calculator above and it returns the same split, which is how the engine was checked.
Tax on the part above the limit
The excess is an employment termination payment, and a genuine redundancy is an excluded payment under s 82-10(6)(a). That matters: only the ETP cap of $270,000 can apply to it. The whole-of-income cap of $180,000, which is reduced dollar for dollar by your other income and catches golden handshakes, never touches a genuine redundancy.
Inside the cap, s 82-10(3) gives you a tax offset that ensures the rate of income tax does not exceed 15% if you are at preservation age or older, and 30% if you are not. Add the 2% Medicare levy and you get the 17% and 32% printed in ATO Schedule 11. Above the cap the rate is the top marginal rate of 45% plus 2%, which is the 47% figure people quote.
A ceiling is not a flat rate. Section 82-10(3) caps the rate, so if your marginal rate on that amount is below 30% you pay your marginal rate and the offset gives you nothing. Schedule 11 is a withholding table, which is why your employer may still take a flat 32% on the day and you sort the difference out in your return.
The age test is worth reading twice, because most pages on this topic still ask whether you are over 55. That was right during the preservation-age transition, which has now finished. Anyone born after 30 June 1964 has a preservation age of 60, and anyone born before that date is at least 62 during FY2026-27. So for a payment made in FY2026-27 the question is simply whether you are 60 or over on 30 June 2027, the last day of the income year, not on the day you are paid.
Your leave payout is not part of the redundancy
This is the single biggest source of error in redundancy estimates. Unused annual leave is excluded from the definition of an employment termination payment by name, at s 82-135(c) of the Income Tax Assessment Act 1997, and unused long service leave at s 82-135(d). They are taxed under Division 83 on ATO Schedule 7, not Schedule 11, and they are reported at Lump Sum A or inside salary and wages rather than as an ETP.
Practically, that means three things. Your leave payout never uses up the redundancy tax-free limit. It never counts towards the ETP cap. And on a genuine redundancy the withholding on it is the concessional one, 30% plus Medicare, rather than the marginal rates that apply on an ordinary resignation. The calculator above keeps annual leave and long service leave on their own rows for exactly this reason. Value the balances first with the annual leave payout calculator, and if any of your long service leave was earned before 18 August 1993 use the long service leave tax calculator for the tranche split.
Redundancy calculator or ETP tax calculator?
Both tools use the same engine, so they will never disagree. They differ in scope.
- This page is the redundancy one. It works out the section 119 weeks you are owed, applies the genuine redundancy tax-free limit to them, and taxes the excess against the ETP cap. It assumes the payment is a genuine redundancy payment within s 83-175.
- The ETP tax calculator is the general one. Use it for the payments this page does not cover: a golden handshake, a gratuity, pay in lieu of notice, unused sick leave or rostered days off, an invalidity payment, a settlement for unfair dismissal or discrimination, an approved early retirement scheme payment, or a redundancy where you had already reached pension age. Of those, only the early retirement scheme payment carries a tax-free limit of its own, because s 83-170 covers it too. The rest are taxed from the first dollar, and the golden handshake group is measured against the whole-of-income cap of $180,000 as well as the ETP cap.
One case neither tool models: a single payment that is part genuine redundancy and part golden handshake. Section 82-10(7) and the ATO's own published worked example disagree on whether the excluded part reduces the whole-of-income cap for the non-excluded part, so rather than pick a side silently, both calculators take one category at a time. Run the redundancy part here and the rest on the ETP page, and treat the boundary as uncertain.
To see the redundancy alongside everything else owed on your last day, including notice and outstanding wages, use the final pay calculator. The prose version of the tax rules is in how redundancy pay is taxed.
Entitlements that go with redundancy pay.
These come up in the same pay run or calculation. Each has its own calculator.
Three real scenarios.
The math gets tangled when employment type, hours and timing combine.
“My role is being made redundant after 5 years. What am I owed?”
NES schedule at 5 years: 10 weeks of redundancy pay. 10 × $1,500 = $15,000 redundancy. Plus 3 weeks notice (s.117) and any unused annual + LSL paid out separately. Genuine redundancy attracts a tax-free cap of $47,603 for 5 yrs ($13,598 + $6,801 × 5, FY2026-27 ATO figures).
“My employer has 12 staff. Do I get redundancy pay?”
No NES redundancy. Small business employers (<15 employees) are exempt under s.121 Fair Work Act. Tom is still owed notice (4 weeks at 8 yrs) and unused leave payouts. Always check the modern award too: some include redundancy regardless of employer size.
“Why does my redundancy go DOWN at 11 years compared to 9 years?”
Quirk of the schedule. The NES caps at 16 weeks at 9-10 years, then drops to 12 weeks at 10+. Originally designed to coordinate with long service leave kicking in at 10 years. Many awards top this back up - check yours.
Redundancy pay questions.
The most-asked questions about this entitlement.
How is redundancy pay calculated in Australia?
Why does redundancy pay drop after 10 years?
Do small businesses have to pay redundancy?
Do casuals get redundancy pay?
Is redundancy pay taxed?
What counts as continuous service for redundancy?
Built on Fair Work Act 2009 (Cth) s.119.
Every redundancy pay calculation on this page is built directly from Fair Work Act 2009 (Cth) s.119 and the relevant modern award where applicable.
Reviewed by a registered HR practitioner.