Redundancy pay calculator Australia 2026–27

NES redundancy pay table

How the calculator works

Enter your weekly base rate or annual salary, your years of continuous service and your age, and tick the small business box if your employer has fewer than 15 employees. The tool reads the NES band for your completed years, multiplies by the base weekly rate, adds notice in lieu for your age and service, and applies the 2026–27 tax-free limit: base amount plus a fixed sum per completed year. Anything above the limit is an employment termination payment, taxed at 32% under preservation age or 17% at or above it, up to the ETP cap. The result shows gross redundancy, the tax-free part, the ETP and the net. Awards and enterprise agreements can pay more than the NES; if yours does, enter the higher number of weeks the agreement provides in the advanced options.

What the base rate includes

Redundancy pay is calculated on the base rate of pay for ordinary hours: the rate before overtime, penalty rates, allowances, bonuses and loadings. For a salaried employee, divide the annual salary by 52. For a part-time employee, use the actual part-time weekly rate. Where the award or agreement uses a different rate, such as an average of the last twelve months for employees with variable hours, use that instead. Salary sacrifice does not reduce the base rate.

When redundancy pay is not owed

The National Employment Standards set out several situations in which no redundancy pay arises, and they account for most of the disputes that reach the Fair Work Commission:

• Less than 12 months of continuous service. The entitlement starts at one year. Notice and accrued annual leave are still payable.
• Small business employers. An employer with fewer than 15 employees at the time of the dismissal — counted across all associated entities, including casuals employed on a regular and systematic basis — is exempt, unless an award or agreement says otherwise.
• Casual employees. Casual service does not count towards redundancy pay, even where it was regular. Service that converted from casual to permanent counts only from the date of conversion for this purpose.
• Fixed-term and task-based contracts that simply reach their agreed end, seasonal work, and dismissal for serious misconduct.
• Acceptable alternative employment. An employer who obtains other acceptable employment for the employee can apply to the Fair Work Commission to have the amount reduced, sometimes to nil. The test looks at pay, hours, seniority, location and continuity of service — an offer that is merely available is not enough; the employer must have been a strong moving force in obtaining it.

A transfer of business is treated differently again: where the new employer recognises prior service, no redundancy is payable because employment continues. Where the new employer declines to recognise it, the old employer must pay.

Consultation and notice sit alongside the payment

Redundancy pay is only one of three obligations that fall due at the same time, and the other two are frequently missed. Every modern award and registered agreement carries a consultation clause requiring the employer to notify affected employees as soon as a definite decision to make major change has been taken, to discuss the effects, and to consider measures to avert or mitigate them. Failing to consult does not make the redundancy invalid on its own, but it is a central factor in an unfair dismissal claim. Separately, notice of termination under the NES runs from one to four weeks depending on length of service, with an extra week for employees over 45 with at least two years of service; it is payable in addition to redundancy pay, either as worked notice or as payment in lieu. The notice and pay in lieu guide sets out the scale.

Redundancy pay and tax

A genuine redundancy payment is taxed far more favourably than ordinary wages, which is why the distinction matters more than the gross figure. Part of the payment is tax-free up to a statutory limit made of a base amount plus an amount for each completed year of service, and that tax-free portion is neither assessable income nor reportable. The balance is an employment termination payment, taxed at concessional rates up to the ETP cap and at the top marginal rate above it. Accrued annual leave and long service leave paid on termination are taxed under their own separate rules, at a flat rate for a genuine redundancy. A payment is only a genuine redundancy if the position itself is abolished and the employee is below the age pension age on the day of dismissal; a resignation or a dismissal for performance does not qualify, whatever the payment is called. The tax-free limit and ETP guide sets out the current figures.

By years of service

• After 1 year: 4 weeks
• After 2 years: 6 weeks
• After 3 years: 7 weeks
• After 5 years: 10 weeks
• After 7 years: 13 weeks
• After 10 years: 12 weeks
• After 15 years: 12 weeks