If your job is made redundant, the National Employment Standards set a minimum payout based on your years of service, on top of notice and any unused leave. A genuine redundancy payment is also partly tax-free.
Here's the NES scale, the 2026-27 tax-free limit and two worked examples.
NES redundancy pay
| Completed years of service | Redundancy pay |
|---|---|
| 1 | 4 weeks |
| 2 | 6 weeks |
| 3 | 7 weeks |
| 4 | 8 weeks |
| 5 | 10 weeks |
| 6 | 11 weeks |
| 7 | 13 weeks |
| 8 | 14 weeks |
| 9 | 16 weeks |
| 10 or more | 12 weeks |
How it's taxed in 2026-27
- Tax-free: A$13,598 plus A$6,801 for each completed year of service, covering redundancy pay and pay in lieu of notice.
- Above that: an employment termination payment, taxed at 32% under 60 and 17% from 60, up to A$270,000.
- Unused annual and long service leave paid on a genuine redundancy: taxed at no more than 32%.
Example: 6 years on A$1,900 a week, aged 42
Redundancy pay: 11 weeks = A$20,900. Notice paid out: 4 weeks = A$7,600.
Both fit within the A$54,404 tax-free limit.
With A$5,000 of annual leave taxed at 32%, take-home is A$31,900.
Example: 12 years on A$3,000 a week, aged 55, 36 weeks agreed
Redundancy A$108,000 plus 5 weeks' notice A$15,000. A$95,210 is tax-free; the other A$27,790 is taxed at 32%: A$114,107 after tax.
How to use this calculator
- Enter your completed years of service, base weekly pay and age.
- Tick if your employer has fewer than 15 employees.
- Add extra weeks from your award or contract, and whether notice is paid out.
- Enter any unused annual and long service leave being paid.
FAQs
How much redundancy pay am I entitled to?
Between 4 and 16 weeks of base pay under the NES, depending on service. Your award, agreement or contract may give more.
Why does redundancy pay drop after 10 years?
The NES scale falls from 16 to 12 weeks at 10 years because long service leave usually becomes payable by then.
Is redundancy pay tax-free?
Up to a limit, if it's a genuine redundancy: $13,598 plus $6,801 for each completed year of service in 2026-27.
Do small businesses pay redundancy?
Employers with fewer than 15 employees don't have to pay NES redundancy pay, though an award or contract may still require it.
Sources
- ATO: Employment termination payments, key rates and thresholds
- ATO: Schedule 11, tax table for employment termination payments
Results are estimates for Australian residents and aren't tax or financial advice. For your own return, check with a registered tax agent. Spotted a mistake? Tell us.