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Redundancy Pay Calculator Australia 2026–27

The NES sets 4 to 16 weeks' pay depending on years of service. For a genuine redundancy, $13,598 plus $6,801 for each completed year is tax-free in 2026–27; the rest is taxed as an employment termination payment.

Updated 2026-10-03 · ATO and official government rates

Redundancy after tax$19,80011 weeks NES minimum + extra · tax-free part $19,800 · 2026–27
NES minimum redundancy pay$19,800
Total redundancy payment$19,800
Tax-free limit (base + per year)$54,404
Taxed as an ETP$0
Tax withheld on the ETP$0

Unused annual and long service leave are paid separately and taxed under different rules. Redundancy pay under the NES does not apply to small business employers (under 15 employees) or to service under 1 year.

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Related

How to calculate your NES redundancy pay

NES redundancy pay is a set number of weeks at your base rate of pay for ordinary hours, and the number of weeks depends on completed years of continuous service. The Fair Work Ombudsman says the base rate excludes bonuses and incentive payments, loadings, allowances, overtime and penalty rates. Unpaid leave does not count towards service, but it does not break it either.

Example: you have 6 years and 4 months of service on a base rate of $1,650 a week. The NES gives 11 weeks, so $18,150. If your employer adds an ex gratia $20,000, the total of $38,150 is within the 2026–27 tax-free limit of $54,404 for 6 years. You keep $38,150.

Continuous serviceNES redundancy pay
1 to under 2 years4 weeks
2 to under 36 weeks
3 to under 47 weeks
4 to under 58 weeks
5 to under 610 weeks
6 to under 711 weeks
7 to under 813 weeks
8 to under 914 weeks
9 to under 1016 weeks
10 years or more12 weeks

Redundancy payout calculator: tax on a larger package

Tax only starts once a genuine redundancy payment passes the tax-free limit of $13,598 plus $6,801 per completed year in 2026–27. Anything above that is an employment termination payment, taxed at 32% under preservation age (60) or 17% from that age (Medicare included), up to the $270,000 ETP cap. Above the cap the rate is 47%.

Example: an enterprise agreement pays 3 weeks per year of service. After 15 years on $3,000 a week, that is $135,000. The first $115,613 is tax-free and $19,387 is an ETP taxed $6,204, which leaves $128,796. Someone aged 60 or over would pay $3,296 instead.

Completed yearsTax-free limit 2026–27Tax-free limit 2025–26
1$20,399$19,652
2$27,200$26,204
5$47,603$45,860
10$81,608$78,620
15$115,613$111,380
20$149,618$144,140
25$183,623$176,900

Genuine redundancy: two different tests

Fair Work and the ATO each have their own test for a "genuine" redundancy. Fair Work’s test decides whether you can claim unfair dismissal. It is genuine if your job no longer needs to be done by anyone, your employer followed the consultation rules in your award or agreement, and you could not reasonably have been redeployed within the business or an associated entity.

The ATO’s test decides whether the tax-free limit applies. Your job must be abolished and you must be under Age Pension age on the day you are dismissed. The ATO treats it as non-genuine if you leave voluntarily, reach normal retirement age, come to the end of a fixed contract, or are dismissed for disciplinary or inefficiency reasons. A non-genuine payment is still an ETP, but none of it is tax-free.

Who gets no redundancy pay under the NES

NES redundancy pay depends on the employer as well as the employee. According to the Fair Work Ombudsman, none is payable to:

  • employees with less than 12 months of continuous service
  • casual employees, apprentices, and trainees engaged only for the training arrangement
  • employees engaged for a specific period, project or season, or dismissed for serious misconduct
  • employees of a small business (fewer than 15 employees, counting associated entities and regular casuals). Exceptions apply to industry-specific redundancy schemes in awards or agreements, and to an employer that is bankrupt or in liquidation and became a small business through redundancies made on or after 15 December 2023.

What else is in your final pay, and how it is taxed

Redundancy pay is separate from notice, and both are usually paid. Payment in lieu of notice made because of a genuine redundancy is part of the redundancy payment for tax. Super guarantee is still payable on it, but not on the redundancy pay itself, according to the ATO’s Payday Super rules.

Under Schedule 7, unused annual leave and leave loading paid on a genuine redundancy are withheld at a flat 32%, whenever the leave accrued. Long service leave accrued after 17 August 1993 is also withheld at 32%. For example, 4 weeks of unused leave at $1,650 ($6,600) would have $2,112 withheld. Sick leave is not paid out. Most awards require final pay within 7 days of your last day, and payment in lieu of notice must be paid on or before the termination day.

Frequently asked questions

How much redundancy pay am I entitled to?

Under the NES: 4 weeks for 1–2 years of service, rising to 16 weeks for 9–10 years, then 12 weeks for 10+ years (when long service leave usually applies). Your award, agreement or contract may give more.

Is there a separate redundancy calculator for NSW?

No. The NES redundancy table and the ATO tax-free limits are national, so the same figures apply in NSW, Victoria, Queensland and every other state for employees in the national workplace relations system. Your award or enterprise agreement may give more.

Can my employer pay less than the NES redundancy amount?

Only with Fair Work Commission approval. The employer must have found you other acceptable employment or be unable to afford the payment. This only applies where the entitlement comes from the NES, not an award or agreement.

Is severance pay the same as redundancy pay?

Severance pay is the payment for each year of service. If the redundancy is genuine, it counts towards the tax-free limit. If not, it is a non-genuine ETP and taxed from the first dollar.

Do I have to report a redundancy payment in my tax return?

The tax-free part is shown on your income statement as a lump sum but is not taxed. The ETP part is reported in your return using the ETP figures your employer gives you, and the ATO checks the tax withheld when you lodge.

What must an employer do when making 15 or more people redundant?

Notify Services Australia in writing before the dismissals, including the reasons, the numbers and categories of employees affected, and the timing. It must also notify or consult any union whose member is affected.

Sources

Figures are taken from official government publications and were last reviewed on 2026-10-03.

  1. ATO: Tax rates – Australian resident (Resident tax rates 2026–27 and 2025–26)
  2. ATO: Tax rates – foreign resident (Foreign resident tax rates 2025–26)
  3. ATO: Tax rates – working holiday makers (Working holiday maker tax rates 2025–26)
  4. ATO: Medicare levy reduction for low-income earners (Table: Medicare levy thresholds for a single individual, 2025–26)
  5. ATO: Medicare levy reduction – family income (family taxable income thresholds 2025–26, +$4,338 per dependent child)
  6. ATO: Medicare levy surcharge income, thresholds and rates (MLS income thresholds and rates for 2026–27 and 2025–26)
  7. ATO: Low income tax offset ($700 max; −5c per $1 over $37,500; −1.5c per $1 over $45,000; nil from $66,667)
  8. ATO: Seniors and pensioners tax offset (SAPTO rates and rebate income thresholds for 2025–26; 12.5c per $1 reduction)
  9. ATO: Study and training loan repayment thresholds and rates (Table 1: 2026–27, Table 2: 2025–26)
  10. ATO: Schedule 1 (NAT 1004) – Using a formula (x = whole dollars + 99c; round to nearest dollar, 50c up)
  11. ATO: Personal income tax – new tax cuts for every Australian taxpayer (2026–27 SAPTO thresholds)
  12. ATO: Schedule 15 – Tax table for working holiday makers (Table A: rates for 2026–27, payments from 1 July 2026)
  13. ATO: Schedule 1 – Statement of formulas for calculating amounts to be withheld (NAT 1004), payments from 1 July 2026 – weekly coefficients
  14. ATO: Schedule 1 (NAT 1004) – Withholding amounts sample data, weekly (from 1 July 2026)
  15. ATO: Schedule 8 – Statement of formulas for calculating study and training support loans components (NAT 3539), payments from 1 July 2026
  16. ATO: Key super rates and thresholds – Contributions caps (Table 1.1 concessional, Table 4 non-concessional)
  17. ATO: Understanding concessional and non-concessional contributions (concessional contributions taxed in the fund at 15%)
  18. ATO: Key super rates and thresholds – Division 293 tax (Table 7: $250,000 threshold, 15% rate)
  19. ATO: Key super rates and thresholds – Super guarantee (Table 21 SG %, Tables 23–24 maximum contribution base)
  20. ATO: Key super rates and thresholds – Government contributions (Table 25 co-contribution thresholds; LISTO)
  21. ATO: Low income super tax offset (15% of concessional contributions, max $500, income $37,000 or less)
  22. ATO: Key super rates and thresholds – Transfer balance cap (Table 26)
  23. ATO: Key super rates and thresholds – Payments from super (Table 12 preservation age)
  24. ATO: Key super rates and thresholds – Employment termination payments (Table 17 ETP cap, Table 20 genuine redundancy limits)
  25. ATO: How ETP components are taxed (17%/32% incl. Medicare; $180,000 whole-of-income cap; 45% + 2% above cap)
  26. ATO: How GST works (10% rate)
  27. ATO: Registering for GST ($75,000 / $150,000 non-profit; taxi or limousine travel incl. ride-sourcing regardless of turnover)
  28. ATO: CGT discount (50% individuals and trusts, 33.33% complying super funds, 12-month ownership)
  29. ATO: Tax reform – Reforming negative gearing and capital gains tax (applies from 1 July 2027)
  30. ATO: Changes to company tax rates (25% base rate entity, $50m aggregated turnover, 2021–22 and future years)
  31. ATO: Company tax rates 2025–26
  32. ATO: Instant asset write-off for eligible businesses (Table 1: $20,000, turnover under $10 million)
  33. ATO Small business newsroom: $20,000 instant asset write-off here to stay (permanent from 1 July 2026)
  34. ATO: Small business income tax offset (16%, max $1,000, turnover under $5 million, 2021–22 onwards)
  35. Fair Work Ombudsman: Minimum wage increase starts today (1 July 2025 – $948.00/week, $24.95/hour, casual $31.19)
  36. Fair Work Ombudsman: Minimum wage increase starts today (1 July 2026 – $1,004.90/week, $26.44/hour, casual $33.05)
  37. Fair Work Commission: Annual Wage Review 2026 ([2026] FWCFB 3500, announced 2 June 2026)
  38. Fair Work Ombudsman: Redundancy pay (NES table, base rate of pay, reducing redundancy pay)
  39. Fair Work Ombudsman: Redundancy (genuine redundancy, consultation, 15 or more employees)
  40. Fair Work Ombudsman: Who doesn't get redundancy pay
  41. Fair Work Ombudsman: Final pay
  42. ATO: Genuine redundancy payments
  43. ATO: Schedule 7 – Tax table for unused leave payments on termination of employment (from 1 July 2026)
  44. ATO: What payments are qualifying earnings (Payday Super, from 1 July 2026)