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Redundancy pay after 5 years (2026–27): 10 weeks, tax-free up to $47,603
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))
Five years: the first long service leave that can be paid out
Five years of service gives 10 weeks of redundancy pay and, in two jurisdictions, the first long service leave you can actually be paid. Under the Long Service Leave Act 1955 (NSW) and the Long Service Leave Act 1976 (ACT), pro-rata long service leave becomes payable on termination at five years — but only on certain grounds: the employer ending the employment, or the employee leaving for illness, incapacity or a pressing domestic necessity. A redundancy is exactly the first of those. Everywhere else the threshold is 7 years and nothing is payable yet. At this point on the scale, therefore, the state you work in is worth roughly 4.3 weeks of pay — more than the difference between two bands of the redundancy scale.
Redundancy and notice after five years, by salary
Genuine redundancy, age 40, notice paid in lieu, NSW. Long service leave and annual leave excluded — this table is the termination payment alone.
| Salary | Weekly base | Redundancy (10 wks) | Notice (3 wks) | Total | Tax-free | ETP tax |
|---|---|---|---|---|---|---|
| $60,000 | $1,154 | $11,538 | $3,462 | $15,000 | $15,000 | $0 |
| $75,000 | $1,442 | $14,423 | $4,327 | $18,750 | $18,750 | $0 |
| $90,000 | $1,731 | $17,308 | $5,192 | $22,500 | $22,500 | $0 |
| $110,000 | $2,115 | $21,154 | $6,346 | $27,500 | $27,500 | $0 |
| $130,000 | $2,500 | $25,000 | $7,500 | $32,500 | $32,500 | $0 |
| $160,000 | $3,077 | $30,769 | $9,231 | $40,000 | $40,000 | $0 |
Add the long service leave separately if you are in New South Wales or the ACT: 0.8667 weeks per year of service, so about 4.3 weeks here, taxed at 32% like the rest of the leave on a genuine redundancy. In the other six jurisdictions that line is zero at five years.
Frequently asked questions
Exactly how many weeks after 5 years?
10 weeks. The National Employment Standards work in bands, not on a sliding scale: the applicable band is “at least 5 years but less than 6”, and the next band starts on your 6th anniversary. A day short of an anniversary is a full band short, so the exact start date on your contract is worth checking against the date notice is given.
If I resign at five years in NSW, do I get the pro-rata?
Not for an ordinary resignation. The Long Service Leave Act 1955 (NSW) opens the pro-rata payment at five years only where the employer terminates, or where you leave because of illness, incapacity or domestic or pressing necessity — a category that is interpreted narrowly and is worth documenting at the time.
Does long service leave count against the redundancy tax-free limit?
No. The limit applies to the redundancy and notice components. Unused long service leave is taxed on its own footing — a flat 32% on a genuine redundancy for leave accrued after 17 August 1993 — and does not consume any of the $47,603.
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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