Redundancy Calculator Australia 2026–27

Minimum redundancy pay (NES)

Completed years of service	Redundancy pay
Less than 1 year	Nil
1 to less than 2	4 weeks
2 to less than 3	6 weeks
3 to less than 4	7 weeks
4 to less than 5	8 weeks
5 to less than 6	10 weeks
6 to less than 7	11 weeks
7 to less than 8	13 weeks
8 to less than 9	14 weeks
9 to less than 10	16 weeks
10 years and over	12 weeks

You also need notice of termination, or pay in lieu: 1 week with up to 1 year of service, 2 weeks up to 3 years, 3 weeks up to 5 years and 4 weeks after that — plus 1 week if you are over 45 with at least 2 years’ service.

How the payout is taxed

Tax-free part: up to $13,598 + $6,801 × completed years of service for 2026–27.
Excess over the tax-free part is an employment termination payment (ETP). Under preservation age it is taxed at 32% including Medicare; from age 60, at 17% — up to the ETP cap of $270,000. Anything above the cap is taxed at 47%.
Unused annual leave and leave loading paid because of a genuine redundancy are taxed at 32%.

Worked example: 6 years’ service on $1,900 a week

6 years' service, age 42, $1,900 a week, $6,000 of unused leave

NES redundancy pay is 11 weeks = $20,900, and 4 weeks’ pay in lieu of notice adds $7,600, for $28,500. The tax-free limit for 6 years is $13,598 + 6 × $6,801 = $54,404, so the whole $28,500 is tax-free. Only the $6,000 of leave is taxed, at 32%, leaving $32,580 in hand.

Total payout after tax$32,580

NES redundancy pay: $20,90011 weeks
Tax-free part: $28,500
Tax withheld: $1,920

Payments

Redundancy pay (11 weeks): $20,900.00
Pay in lieu of notice (4 weeks): $7,600.00
Unused annual leave: $6,000.00
Gross payout: $34,500.00

Tax · 2026–27

Tax-free limit$13,598 + $6,801 × 6 years: $54,404.00
Taxable part (employment termination payment): $0.00
Tax on ETP (32% up to the ETP cap): $0.00
Tax on unused leave (32%): −$1,920.00
Net payout: $32,580.00

What changed for 2026–27

The tax-free limit rose from $13,100 + $6,552 per year (2025–26) to $13,598 + $6,801 per year, and the ETP cap from $260,000 to $270,000. Both are indexed to average weekly ordinary time earnings each year. The NES redundancy scale itself has not changed.

Tips

Ask for a written breakdown separating redundancy pay, notice, leave and any extra payment — each is taxed differently.
Check your agreement for a more generous formula, often 2 or 3 weeks per year of service.
Don’t forget long service leave, which depends on state law and is paid separately.
Consider timing. If the payment straddles 30 June, the tax-free limit and ETP cap that apply are those for the income year in which you are paid.

Questions people ask

How much redundancy pay am I entitled to?

Under the National Employment Standards, from 4 weeks' pay after 1 year of continuous service, rising to 16 weeks after 9 years, then dropping to 12 weeks after 10 years (because long service leave usually becomes available). Your award, agreement or contract may give more.

How much of my redundancy is tax-free?

For 2026–27, $13,598 plus $6,801 for each completed year of service, provided it is a genuine redundancy and you are under Age Pension age. The tax-free part does not include unused annual leave or long service leave.

Is redundancy pay based on my full pay?

No. It uses your base rate for ordinary hours — excluding overtime, penalty rates, allowances and bonuses.

Do small businesses have to pay redundancy?

Employers with fewer than 15 employees are generally exempt from NES redundancy pay, unless an award or agreement says otherwise.

What is "genuine redundancy" for tax purposes?

Your position must have been abolished, the dismissal must be before Age Pension age, the payment must exceed what you would have received on resignation, and the arrangement must be at arm's length.

This is an estimate based on published rates, not tax or financial advice. Your payslip or assessment may differ. We are an independent site, not affiliated with any government agency. Read the full disclaimer.

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