Redundancy pay calculator (Australia) 2026-27
Work out your NES redundancy pay and notice from your years of service, then see how it's taxed: the tax-free part of a genuine redundancy, the employment termination payment (ETP) and the tax withheld from it, and the 32% withheld from unused annual leave and long service leave. It uses the Fair Work redundancy table and the ATO's 2026-27 limits, and matches the ATO's and Fair Work's worked examples.
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CalculatorWorked examplesNES tableHow it's taxedFAQ
Worked examples
Fair Work example: Melissa has worked full time for 3 years when her role is made redundant. She gets 7 weeks of redundancy pay and 3 weeks of notice (or pay instead of notice).
ATO example (Alec, 2026-27): Alec is 30 and is made redundant after 5 years. He gets $48,000 of genuine redundancy pay plus a $17,678 gratuity, and has already been paid $140,000 in salary this year.
- Tax-free limit = $13,598 + 5 × $6,801 = $47,603. The $397 over the limit is an ETP. Withheld: 32% = $127.
- The gratuity is an ETP under the smaller of the ETP cap and the whole-of-income cap. Whole-of-income cap = $180,000 − $140,000 = $40,000. The gratuity fits under it, so the amount withheld is 32% × $17,678 = $5,657.
ATO examples (Schedule 11): a $45,000 genuine redundancy ETP for someone under 60 has $14,400 withheld (32%). A $120,000 golden handshake for someone already paid $100,000 that year: whole-of-income cap $80,000, so $25,600 + 47% × $40,000 = $44,400. A $10,000 golden handshake after $84,000 of wages: $3,200.
Typical case, 2026-27: $85,000 a year (38 hours), 6 years 2 months of service, age 41, genuine redundancy, paid notice. NES = 11 weeks × $1,634.62 = $17,980.82. Notice = 4 weeks = $6,538.48. Genuine redundancy payment $24,519.30 is under the tax-free limit of $54,404, so none of it is taxed.
NES redundancy pay table
| Continuous service | Redundancy pay |
|---|---|
| Less than 1 year | Nil |
| 1 to less than 2 years | 4 weeks |
| 2 to less than 3 years | 6 weeks |
| 3 to less than 4 years | 7 weeks |
| 4 to less than 5 years | 8 weeks |
| 5 to less than 6 years | 10 weeks |
| 6 to less than 7 years | 11 weeks |
| 7 to less than 8 years | 13 weeks |
| 8 to less than 9 years | 14 weeks |
| 9 to less than 10 years | 16 weeks |
| 10 years or more | 12 weeks |
Redundancy pay and notice are paid at your base rate of pay for ordinary hours, so not including overtime, penalty rates or allowances. Notice is 1 week (up to 1 year of service), 2 weeks (1 to 3 years), 3 weeks (3 to 5 years) or 4 weeks (more than 5 years), plus 1 week if you're 45 or older with at least 2 years of service. NES redundancy pay doesn't apply to casuals, some fixed-term employees, or employers with fewer than 15 employees. Your award, agreement or contract can give you more.
How redundancy pay is taxed
- Tax-free part: a genuine redundancy payment is tax-free up to a limit. For 2026-27 that's $13,598 + $6,801 for each completed year of service ($13,100 + $6,552 in 2025-26).
- Over the limit: the excess is an ETP. If you're under 60, 32% is withheld (17% from 60) up to the ETP cap of $270,000 (2026-27), and 47% above it.
- Pay in lieu of notice can be part of the genuine redundancy payment if you wouldn't have received it had you resigned (ATO ruling TR 2009/2, para 64). It usually counts. If it doesn't, it's an ETP under the smaller of the ETP cap and the whole-of-income cap ($180,000 minus your other taxable pay this year).
- Unused annual leave (including loading) and long service leave accrued after 15 August 1978, paid on genuine redundancy: 32% withheld.
FAQ
How much redundancy pay do I get in Australia?
Under the National Employment Standards it depends on your continuous service: 4 weeks after 1 year, rising to 16 weeks for 9 to 10 years, then 12 weeks from 10 years. It’s paid at your base rate for ordinary hours. Your award, agreement or contract may give more.
Is redundancy pay tax-free?
A genuine redundancy payment is tax-free up to a limit: $13,598 plus $6,801 for each completed year of service in 2026-27. Anything over the limit is an employment termination payment, with 32% withheld if you’re under 60.
How much notice do I get when made redundant?
1 week if you’ve worked up to 1 year, 2 weeks for 1 to 3 years, 3 weeks for 3 to 5 years and 4 weeks for more than 5 years. Add 1 week if you’re 45 or older with at least 2 years of service. Your employer can pay you instead of having you work it.
How is unused annual leave taxed on redundancy?
If it’s a genuine redundancy, unused annual leave and leave loading are taxed at a flat 32% (including Medicare levy), whenever the leave was accrued. Long service leave accrued after 15 August 1978 is also taxed at 32%.
Do small businesses have to pay redundancy?
Not under the NES. Employers with fewer than 15 employees are exempt from NES redundancy pay, but an award or agreement can still require it, and notice still applies.
What is the ETP cap for 2026-27?
$270,000 (it was $260,000 in 2025-26). The whole-of-income cap, which applies to payments like golden handshakes and non-genuine redundancy payments, stays at $180,000 less your other taxable income for the year.
Sources (checked 17 Oct 2026): Fair Work Ombudsman Redundancy pay and entitlements; ATO Employment termination payments (ETP cap and Table 20 limits); ATO Schedule 11: tax table for employment termination payments; ATO Schedule 7: unused leave payments on termination; ATO Redundancy and early retirement.
General information, not tax, legal or employment advice. Awards, agreements and contracts can change your entitlements. Check with the Fair Work Ombudsman, the ATO or a registered tax agent.