Redundancy Pay Calculator Australia
Your NES redundancy weeks by years of service, the payout at your weekly base pay, and how much is tax-free in 2026-27.
Redundancy Pay Calculator 2026-27
How much redundancy pay do you get?
Weeks of pay by continuous service, at your base rate for ordinary hours.
Redundancy pay, one part of your final pay, starts at 4 weeks once you pass one year of continuous service, climbs to 16 weeks at nine years, then drops to 12 weeks at ten years or more. Under one year, the NES entitlement is nil, though unused annual leave is still paid out. The weeks are paid at your base rate, and awards or agreements can only add to these minimums, never cut them.
| Period of continuous service | Redundancy pay | On a $90,000 salary |
|---|---|---|
| Less than 1 year | Nil | Nil |
| At least 1 year but less than 2 | 4 weeks | $6,923 |
| At least 2 but less than 3 | 6 weeks | $10,385 |
| At least 3 but less than 4 | 7 weeks | $12,115 |
| At least 4 but less than 5 | 8 weeks | $13,846 |
| At least 5 but less than 6 | 10 weeks | $17,308 |
| At least 6 but less than 7 | 11 weeks | $19,038 |
| At least 7 but less than 8 | 13 weeks | $22,500 |
| At least 8 but less than 9 | 14 weeks | $24,231 |
| At least 9 but less than 10 | 16 weeks | $27,692 |
| At least 10 years | 12 weeks | $20,769 |
Dollar column computed at $90,000 divided by 52, a weekly base pay of $1,730.77. Source: Fair Work Ombudsman, Notice of termination and redundancy pay fact sheet, content last updated 16 January 2026.
Why does redundancy pay drop from 16 to 12 weeks at 10 years?
The 2004 Redundancy Case, and why the eleventh row of the table surprises everyone.
At nine years of service you are owed 16 weeks. At ten years, 12 weeks. The table is printed correctly: the entitlement genuinely falls by 4 weeks the day you pass ten years of continuous service.
The drop comes from the 2004 Redundancy Case, decided by the Australian Industrial Relations Commission. When the Commission lifted the redundancy scale for shorter-service employees, it left the 10-year-plus rate at 12 weeks, reasoning that employees with a decade of service also become entitled to long service leave, which is paid separately on termination. The Fair Work Act carried that scale into the NES.
The practical edge case is anyone sitting between nine and ten years when restructuring talk starts. On a $90,000 salary, 16 weeks is $27,692 and 12 weeks is $20,769, a difference of $6,923 either side of the ten-year line. Long service leave partly offsets it, but the redundancy line item alone gets smaller. If your payslip service date puts you near the boundary, the timing of the termination date matters.
How is redundancy pay calculated?
Weeks from the NES table, multiplied by your weekly base pay.
Two inputs decide the whole figure: your continuous service and your base rate of pay for ordinary hours. Six years of service earns 11 weeks; at a weekly base pay of $1,730.77 on a $90,000 salary that is $19,038.
Base rate is the trap. It excludes incentive payments and bonuses, loadings, monetary allowances, overtime and penalty rates, and any other separately identifiable amounts. A shift worker whose take-home is built on penalties gets redundancy weeks priced well below their usual pay. Payment in lieu of notice works the other way, at the full rate including all of those, which is why one termination produces two different weekly rates on the same payslip. The final pay calculator covers that contrast.
An employer can apply to the Fair Work Commission to reduce redundancy pay if they find the employee other acceptable employment or cannot afford the full amount. Absent such an order, the NES table is the floor.
How much redundancy pay is tax-free in 2026-27?
A base amount plus a per-year amount, both indexed, both from the ATO.
A genuine redundancy payment is tax-free up to $13,598 plus $6,801 for each completed year of service, the FY2026-27 amounts published by the ATO. Only completed years count: 9 years and 11 months counts as 9. The tax-free amount does not enter your assessable income at all, and no withholding applies to it.
| Completed years of service | Tax-free limit 2026-27 | NES weeks |
|---|---|---|
| 1 | $20,399 | 4 weeks |
| 2 | $27,200 | 6 weeks |
| 3 | $34,001 | 7 weeks |
| 5 | $47,603 | 10 weeks |
| 7 | $61,205 | 13 weeks |
| 9 | $74,807 | 16 weeks |
| 10 | $81,608 | 12 weeks |
| 15 | $115,613 | 12 weeks |
Tax-free limit computed as $13,598 + $6,801 per completed year, FY2026-27. Source: ATO, key superannuation rates and thresholds, employment termination payments.
Notice how generous the limit is against the NES minimum. At 2 completed years the limit is $27,200, which covers 6 weeks of pay at up to $4,533.33 a week. Unless your weekly base pay is above roughly that level, the entire NES minimum is tax-free. The taxable slice usually appears when an employer pays above the minimum under a contract or an enhanced redundancy scheme.
What happens to the amount above the tax-free limit?
It becomes an employment termination payment, withheld under ATO Schedule 11.
Any genuine redundancy money above the tax-free limit is a taxable ETP. Your employer withholds on it at rates set by ATO Schedule 11, driven by your age against preservation age and by the caps.
| Amount | Age | Withholding 2026-27 |
|---|---|---|
| Up to the cap | Under preservation age | 32% |
| Up to the cap | Preservation age or over | 17% |
| Above the cap | All ages | 47% |
Source: ATO Schedule 11, tax table for employment termination payments. ETP cap for 2026-27: $270,000, indexed annually. Whole-of-income cap: $180,000, not indexed.
Which cap applies depends on the payment. A genuine redundancy amount above the tax-free limit is an excluded payment, so only the ETP cap of $270,000 (FY2026-27) applies to it. Payments such as golden handshakes, unused sick leave and payment in lieu of notice are tested against the smaller of the ETP cap and the whole-of-income cap of $180,000, which is reduced by your other taxable income for the year. If your income statement shows ETP code O or P, the whole-of-income cap is the one in play.
These percentages are withholding, not final tax. The ETP is assessed in your return, and a redundancy that interacts with the caps, several payments, or a mid-year termination is genuinely complex. At that point a registered tax agent is worth the money.
Do small business employees get redundancy pay?
Most do not. The 15-employee line decides it, counted on the day notice is given.
If your employer is a small business, fewer than 15 employees at the time notice is given, the NES redundancy pay entitlement generally does not apply. This is the single biggest exclusion, and it surprises people who have watched the table above and counted their weeks.
The headcount has rules. Count all employees, including the ones being dismissed. Count casuals only if they are employed on a regular and systematic basis. Count employees of associated entities, because related companies are treated as one employer for this test. A cafe with 9 permanent staff and 5 regular casuals is at 14 and under the line; hire one more regular casual and the exclusion disappears.
Two doors stay open. Some awards and enterprise agreements contain industry-specific redundancy schemes that apply regardless of employer size, so read yours before writing the entitlement off. And everything else in your final pay survives: unused annual leave with loading, notice or payment in lieu, and outstanding wages are all owed whatever the headcount. The final pay calculator prices those pieces.
Who does not get NES redundancy pay?
Service length, employment type and conduct can each remove the entitlement.
No NES redundancy pay is owed to employees with less than 12 months of continuous service, employees engaged for a fixed period or season, most casuals, trainees engaged only for the length of the training agreement, apprentices, employees dismissed for serious misconduct, and most small business employees. Source: Fair Work Ombudsman, Notice of termination and redundancy pay fact sheet.
Two of these carry traps. Casual service can still count toward continuous service in some circumstances once you convert to permanent, which shifts which row of the table you land on. And a fixed-term contract that runs out on its end date is not a redundancy at all, so nothing in this table applies. If your situation mixes categories, Fair Work’s own tools or an employment lawyer beat any calculator.
What else lands in your final pay when you are made redundant?
Redundancy pay is one of four line items, each with its own rate and tax.
A genuine redundancy final pay typically stacks four components. Outstanding wages, at your actual earnings. Unused annual leave and any loading, at your base rate, withheld at a flat 32% under ATO Schedule 7 because the reason is redundancy rather than resignation. Notice, worked or paid in lieu at your full rate, from 1 to 4 weeks by service plus 1 week if you are over 45 with at least 2 years of service. Then the redundancy weeks themselves.
Each piece is taxed under a different rule, which is why the payslip looks inconsistent even when it is right. The leave calculator prices the leave payout and its 32% withholding, and the final pay calculator assembles the leave and notice components together.
Who uses this calculator?
Four situations where the weeks table turns personal.
Facing a restructure
Sizing the safety net
Consultation has started and you want the floor number before any meeting. Service years and weekly base pay are all the NES needs.
Nine years in
The 10-year cliff
Between 9 and 10 years the entitlement peaks at 16 weeks before dropping to 12. If you are near the line, the termination date moves 4 weeks of pay.
Offered a package
Minimum vs offer
An employer offer only means something against the NES floor and the $13,598 + $6,801 per year tax-free room it sits in.
Working for a small employer
The 15-employee test
Under 15 employees usually means no NES redundancy pay, but award schemes and the rest of the final pay still apply. Count the headcount properly first.
What changed on 1 July 2026?
The weeks table is fixed law; the tax numbers around it are indexed.
The NES weeks table did not move, and it does not index. What moved for 2026-27 are the ATO amounts: the genuine redundancy tax-free base of $13,598 plus $6,801 per completed year, and the ETP cap of $270,000, indexed to AWOTE in $5,000 increments. The whole-of-income cap stays at $180,000; it is not indexed and applies to 2026-27 and future years.
The ATO also republished Schedule 7 on 17 June 2026, keeping the flat 32% withholding on unused leave in a genuine redundancy, and the 2026-27 tax tables behind marginal-rate withholding now carry the 15% first bracket. None of that changes your redundancy weeks; all of it changes what lands in your account.
What are the common mistakes with redundancy pay?
Five errors, from misread tables to misapplied rates.
Reading the 10-year drop as an error
16 weeks at nine years, 12 at ten. The 2004 Redundancy Case made it deliberate, offset by long service leave. Payroll systems that smooth it out are wrong.
Pricing weeks at full pay
Redundancy weeks use the base rate, excluding penalties, loadings, allowances and bonuses. Budgeting on your usual take-home overstates the payout.
Assuming the whole payout is tax-free
Only the amount within $13,598 plus $6,801 per completed year (FY2026-27) is tax-free. The excess is an ETP with real withholding.
Counting partial years
The tax-free formula uses completed years only. Nine years and eleven months is nine years. The NES weeks table has its own boundaries, checked separately.
Forgetting the small business exclusion
Fewer than 15 employees when notice is given usually means no NES redundancy pay. Check the headcount rules before promising yourself the table.
Redundancy pay FAQ
Common questions about redundancy entitlements and tax.
Sources
The documents behind every figure on this page.
- Fair Work Ombudsman, Notice of termination and redundancy pay fact sheet, content last updated 16 January 2026.
- Fair Work Ombudsman, Redundancy pay (fairwork.gov.au, ending employment).
- ATO, key superannuation rates and thresholds, employment termination payments (2026-27 tax-free amounts and ETP cap).
- ATO, Schedule 11, Tax table for employment termination payments.
- ATO, The whole-of-income cap and your tax, last updated 5 June 2026.
- ATO, Schedule 7, Tax table for unused leave payments on termination of employment (NAT 3351, QC107125), published 17 June 2026.
Last verified 23 July 2026.