PayTallyRedundancy pay

Redundancy pay calculator: the minimum you're owed, and how much of it is tax-free

Your details

Continuous service (time with this employer)
Only completed years count; time as a casual generally doesn't (s123(1)(c)).
?

Continuous service is unbroken time with the one employer. Unpaid leave is not counted but does not break it. If the business was sold and you kept your job, your service with the old owner usually carries over (transfer of business, s122). 8 years 11 months is paid as 8 years.

Base pay for your ordinary hours: no overtime, penalties, allowances or bonuses.
?

The Act uses your base rate of pay for ordinary hours (s119(2)). If you are part time, use your actual ordinary weekly earnings. If your hours varied, use the ordinary hours you were working when the job ended.

Employer size
Count everyone at the time, including regular casuals and related companies.
Employment type
Change tax year or state · 2026-27, NSW
The tax-free limit depends on when you are paid, not when the job ended.
State or territory
Redundancy pay is national. The state only changes a note in the result.
Other termination pay (optional)
Not redundancy pay, and taxed under their own rules, but part of the same final payment.
Only used to value unused annual leave. 38 is full time.
Work this out with the long service leave tool.
Only if your notice is being paid out rather than worked.

How this is worked out

The calculator applies the minimum rules in the Fair Work Act 2009 and the ATO's published tax-free limit. It does not know your award or agreement, which can only add to these figures.

1. Redundancy pay = weeks × ordinary weekly pay

Section 119 of the Fair Work Act sets a number of weeks' pay for each band of completed years of continuous service (time with this employer), at your base rate of pay for ordinary hours. Months beyond a completed year do not count: 8 years 11 months is paid as 8 years. Base rate leaves out overtime, penalty rates, incentive payments, bonuses, loadings and allowances. Time worked as a casual generally does not count: casual employees are excluded from redundancy pay by s123(1)(c), even if you later became permanent.

The weeks are not "a week per year": they rise to 16 weeks at 9 years, then the Act sets 12 weeks for 10 years or more. See the FAQ on why.

Transfer of business (s122): if the business was sold and the new owner kept you on, your service with the old owner usually counts toward redundancy pay with the new one, unless the new employer told you in writing before the transfer that it would not.

2. Aged 45 or over

The redundancy pay table has no age loading. Age matters in two other ways: under s117, employees over 45 with at least 2 years' service get one extra week of notice (or pay instead of working it); and some awards and enterprise agreements add redundancy weeks for older employees. The calculator shows the notice effect as a one-line note and does not add anything to redundancy pay.

3. Tax-free limit (genuine redundancy)

If it is a genuine redundancy for tax purposes (your job itself was abolished, you were dismissed because of it, you are under pension age, and the amount is more than you would have got on resigning), the ATO lets part of the payment be received tax-free. For 2026-27 the limit is $13,598 plus $6,801 for each completed year of service. For 2025-26 it was $13,100 plus $6,552. The limit is indexed each 1 July. The year that applies is the year you are paid, not the year the job ended.

4. Anything above the limit is an ETP

Any redundancy pay above the tax-free limit is an ETP (the part taxed as an employment termination payment). It is taxed at a lower rate up to the ETP cap of $270,000 in 2026-27: the ATO withholds 32% if you are under preservation age and 17% at or above it (both include the Medicare levy), with 47% on any amount above the cap. If the payment is not a genuine redundancy (for example you resigned with a payout), the whole amount is an ETP and the lower of the ETP cap and the $180,000 whole-of-income cap applies. This calculator shows the split only; it does not work out the ETP tax, because your preservation age and other income change the answer.

5. Other termination pay

Unused annual leave, long service leave and notice paid instead of worked are paid alongside redundancy pay but are not redundancy pay and are not covered by the tax-free limit. On a genuine redundancy, unused leave is taxed under the ATO's lump-sum rules (withholding capped at 32%); notice paid out is generally an ETP. The calculator values annual leave at your ordinary hourly rate (weekly pay ÷ ordinary hours), long service leave at your weekly pay, and notice at your weekly pay. The Act requires notice paid out to be at your full rate (including loadings), so that line may be understated.

Worked example

8 years 3 months of service on $1,500 a week: 8 completed years = 14 weeks under s119 = $21,000. The 2026-27 tax-free limit for 8 years is $13,598 + 8 × $6,801 = $68,006, so the whole $21,000 is tax-free if it is a genuine redundancy. At 11 years the table gives 12 weeks = $18,000, all tax-free under the $88,409 limit.

Who is not covered

Fair Work Act s119 redundancy pay table

Weeks of pay at the base rate for ordinary hours, by completed years of continuous service. Verified against the Fair Work Act 2009 compilation of 7 July 2026 on 8 November 2026.

Source: Fair Work Act 2009 (Cth) s119(2).
Period of continuous serviceRedundancy pay
Less than 1 yearnil
At least 1 year but less than 2 years4 weeks
At least 2 years but less than 3 years6 weeks
At least 3 years but less than 4 years7 weeks
At least 4 years but less than 5 years8 weeks
At least 5 years but less than 6 years10 weeks
At least 6 years but less than 7 years11 weeks
At least 7 years but less than 8 years13 weeks
At least 8 years but less than 9 years14 weeks
At least 9 years but less than 10 years16 weeks
At least 10 years12 weeks

Frequently asked questions

Is redundancy pay taxed in Australia?

Partly. If it is a genuine redundancy, the first part is tax-free: $13,598 plus $6,801 for each completed year of service in 2026-27. Anything above that is an ETP (the part taxed as an employment termination payment), taxed at a lower rate (32% under preservation age, 17% at or above it, including the Medicare levy) up to the ETP cap of $270,000, and at 47% above the cap. Unused leave is taxed separately.

How many weeks' redundancy pay am I entitled to?

Between 4 and 16 weeks under the Fair Work Act, depending on completed years of service: 4 weeks at 1 year, rising to 16 weeks at 9 years, and 12 weeks for 10 years or more. Less than 12 months' service gets nothing. Your award or agreement may give more.

Why does redundancy pay drop to 12 weeks after 10 years?

Because the s119 table assumes that an employee with 10 or more years' service also receives long service leave, which is paid out when the job ends. The 12-week figure came from the 2004 Australian Industrial Relations Commission redundancy test case and was carried into the Fair Work Act in 2009. It is a legal minimum, so an employer can pay 16 weeks or more, and many awards and agreements do.

Do small businesses have to pay redundancy?

Generally no. An employer with fewer than 15 employees at the time of the redundancy (counting all employees, including regular casuals and related companies) does not have to pay redundancy pay under the Act. Exceptions: some awards have industry-specific redundancy schemes that apply to small businesses, and an employer that shrinks below 15 by making people redundant may still owe redundancy pay to those employees. Notice of termination still applies.

Is voluntary redundancy taxed differently?

Not usually. A voluntary redundancy can still be a genuine redundancy for tax if the position is actually abolished and the other conditions are met, so the same tax-free limit applies. What matters to the ATO is whether the job ceased to exist, not whether you volunteered. If the position is not abolished (for example you resign with a payout), the whole amount is an ETP with the whole-of-income cap applied.

What counts as my weekly pay for redundancy?

Your base rate of pay for ordinary hours. It leaves out overtime, penalty rates, shift and other loadings, allowances, bonuses and commissions. If you are part time, use your actual ordinary weekly earnings. If your hours vary, Fair Work generally uses the ordinary hours you were working at the time the job ended.

Do casual employees get redundancy pay?

No. Casuals are excluded from redundancy pay under the Fair Work Act (s123(1)(c)), and time worked as a casual generally does not count toward service even if you later became permanent. Some agreements provide otherwise, so check yours.

Does being over 45 give me more redundancy pay?

Not under the Fair Work Act. The extra week for employees over 45 with at least 2 years' service applies to the minimum notice period (s117), not redundancy pay. Some awards and enterprise agreements do add redundancy weeks for older employees, so check your award.

Sources

All checked 8 November 2026. Primary sources first.

  1. Fair Work Act 2009 (Cth), s117 (notice), s119 (redundancy pay), s121–s123 (exclusions) and s122 (transfer of business), compilation of 7 July 2026, Federal Register of Legislation: legislation.gov.au/C2009A00028. Also on AustLII: s119.
  2. Fair Work Ombudsman, Redundancy pay and entitlements: fairwork.gov.au, and Who doesn't get redundancy pay. Fair Work Infoline 13 13 94.
  3. Australian Taxation Office, Key superannuation rates and thresholds: Employment termination payments (genuine redundancy tax-free limits and ETP cap, 2026-27: $13,598 + $6,801; cap $270,000).
  4. Australian Taxation Office, Schedule 11: Tax table for employment termination payments (ETP withholding rates, whole-of-income cap $180,000).
  5. Australian Taxation Office, How ETP components are taxed, and Taxation Ruling TR 2009/2 (genuine redundancy payments).