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Final pay on a $$120,000 salary (2026–27): redundancy, notice, leave and tax
Estimated final pay after tax
$28,290
Gross $31,603 · tax $3,313 · net $28,290
| Weekly base pay | $1,634.62 |
| Redundancy pay (NES: 10 weeks) | $16,346 |
| Notice in lieu (3 weeks) | $4,904 |
| Unused annual leave (10.0 days) | $3,269 |
| Long service leave NSW (4.33 weeks) | $7,084 |
| Gross final pay | $31,603 |
| Tax-free redundancy (limit $47,603) | $21,250 |
| Tax on leave (32%) | − $3,313 |
| Net final pay (estimate) | $28,290 |
Pro-rata after 5 years (New South Wales). (Long Service Leave Act 1955 (NSW))
Above $135,000: where the flat rate finally works in your favour
$120,000 is $2,308 a week, and it is the first salary on this site where the concessional label on the ETP rate is earned. The 37% bracket starts at $135,000; add the Medicare levy and your marginal rate is 39%. The taxable part of a redundancy is still taxed at a flat 32%. Every dollar above the tax-free limit therefore costs you 7 cents less than the same dollar of salary would. The leave payout gets the same flat rate. On a payout of $61,539 the saving is not theoretical — it is the difference between two figures on the same payslip.
Final pay on $120,000 by years of service
Genuine redundancy, age 45, notice in lieu, 10 days of unused annual leave, NSW long service leave.
| Service | Redundancy | Notice | Annual leave | LSL | Gross | Tax | Net |
|---|---|---|---|---|---|---|---|
| 1 yr | $9,231 | $2,308 | $4,615 | $0 | $16,154 | $1,477 | $14,677 |
| 2 yrs | $13,846 | $4,615 | $4,615 | $0 | $23,077 | $1,477 | $21,600 |
| 3 yrs | $16,154 | $4,615 | $4,615 | $0 | $25,385 | $1,477 | $23,908 |
| 5 yrs | $23,077 | $6,923 | $4,615 | $10,000 | $44,616 | $4,677 | $39,939 |
| 7 yrs | $30,000 | $9,231 | $4,615 | $14,001 | $57,847 | $5,957 | $51,890 |
| 10 yrs | $27,692 | $9,231 | $4,615 | $20,001 | $61,539 | $7,877 | $53,662 |
| 15 yrs | $27,692 | $9,231 | $4,615 | $30,001 | $71,540 | $11,077 | $60,462 |
| 20 yrs | $27,692 | $9,231 | $4,615 | $40,002 | $81,540 | $14,277 | $67,263 |
On this salary the tax column is worth reading twice. The flat rate applies to the leave at every line and to any part of the redundancy above the limit — but at $120,000 the sixteen-week NES maximum is $36,923 against a limit of $81,608 at ten years, so the redundancy itself still clears it. The gain shows up on the leave line, taxed 7 points below your marginal rate.
Ten years of service in each state
Same salary and leave balance, each state's long service leave Act at ten years; the last column is a resignation.
| State | Long service leave | Net on redundancy | Net on resignation |
|---|---|---|---|
| New South Wales | $20,001 | $53,662 | $16,066 |
| Victoria | $20,001 | $53,662 | $16,066 |
| Queensland | $20,001 | $53,662 | $16,066 |
| Western Australia | $20,001 | $53,662 | $16,066 |
| South Australia | $30,000 | $60,462 | $22,165 |
| Tasmania | $20,001 | $53,662 | $16,066 |
| Australian Capital Territory | $20,001 | $53,662 | $16,066 |
| Northern Territory | $30,000 | $60,462 | $22,165 |
Frequently asked questions
How much redundancy pay on a $120,000 salary?
On a salary of $120,000 the base rate works out at $2,308 a week, and redundancy pay is that figure multiplied by the number of weeks set by the National Employment Standards: $23,077 after 5 years, which is 10 weeks; $36,923 after 9 years, the peak of the scale at 16 weeks; and $27,692 at 10 years or more, where the scale drops back to 12 weeks. An award or enterprise agreement may provide more, never less.
Is the flat rate 32% or 17%?
32% below preservation age and 17% from the day you reach it, which is currently 60. Both figures already include the Medicare levy. The age that is tested is your age on the last day of the employment, not on the day the money is paid, so a departure arranged shortly before a sixtieth birthday can cost fifteen percentage points on the whole of the excess above the tax-free limit.
Does a bonus paid on exit get the same treatment?
No. A bonus earned for work done is ordinary income taxed at 39% here, whatever the timing. Only payments made because the employment ended can be an ETP. Employers sometimes bundle the two in one figure; ask for them to be itemised before you sign.
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Sources
Written by Mottalib Radif
INSEAD MBA · Mines Saint-Étienne engineer · Personal finance and employment entitlements
Updated on · Editorial policy · Contact
Rates 2026–27, last updated 2026-09-16