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Calculate your NES redundancy pay, notice, leave and ETP tax — using the current ATO tax-free amounts and preservation age rules.
Updated: 7 August 2026 · Reviewed by Mohsin Iqbal · 15 min read
ℹ️ This estimates NES minimum entitlements only. Your Award, Enterprise Agreement or employment contract may provide more — you're entitled to whichever is higher. If you've recently been made redundant and need support, Services Australia and the Fair Work Ombudsman both offer free guidance, and financial counselling is available free via the National Debt Helpline (1800 007 007).
Your Employment
Financial year
Years of continuous service
years
Your age
yrs
Weekly gross pay
$
Annual leave accrued
weeks
Long service leave accrued
weeks
Employer size
Optional Extras
Additional weeks under Award/EA
wks
If your Award or Enterprise Agreement gives more than the NES minimum, add the extra weeks here.
Ex-gratia / settlement payment
$
Additional employer payment on top of NES/Award redundancy pay — generally taxed the same way as the rest of your genuine redundancy payment.
Redundancy Entitlement
Total Net Payout (after tax)
—
Component
Amount
ℹ️ Centrelink waiting periods depend on your individual circumstances. This calculator does not estimate Centrelink outcomes — see the FAQ below for general guidance.
✅ Next Steps
Confirm whether your Award or Enterprise Agreement provides more than the NES minimum
Request a written redundancy statement from your employer
Check your unused annual and long service leave balance is correct
Confirm your ETP payment summary once issued
Contact the Fair Work Ombudsman if you're unsure your redundancy is genuine
Speak to a registered tax agent before lodging your return, especially for larger payouts
Assumes a genuine redundancy under ATO rules — not a voluntary resignation or non-genuine termination
Notice pay and long service leave are taxed here at the same concessional redundancy rate as a simplifying assumption — in practice, payment in lieu of notice and LSL can follow different rules depending on structure and accrual dates
Long service leave accrued before 16 August 1978 has special concessional treatment (only 5% assessable) not modelled here
ETP cap calculation uses the lesser of the ETP cap and whole-of-income cap as a simplification — your actual whole-of-income cap depends on your other income for the year
Preservation age is approximated by your entered age — actual preservation age depends on your exact date of birth
Does not model HECS-HELP, Division 293 tax, or how this payment interacts with your full-year tax return
Ex-gratia payments are assumed to be taxed as part of your genuine redundancy payment — always confirm this classification with your employer or a tax agent, since some ex-gratia payments may be structured differently
Estimates only — not financial, tax or legal advice. Confirm your entitlement with the Fair Work Ombudsman and your exact tax position with the ATO or a registered tax agent.
⏱️ Last reviewed: 7 August 2026 · Written and reviewed by Mohsin Iqbal under our editorial policy and calculation methodology. ATO tax-free amounts and caps are indexed on 1 July each year — always confirm current figures with the ATO or a registered tax agent.
📖 Approx. 15 min read⚖️ NES & ATO aligned · 2026–27 tax🔄 Updated 7 August 2026
For 2026–27, the genuine redundancy tax-free amount is $13,598 plus $6,801 per completed year of service — indexed annually by the ATO.
Redundancy pay above the tax-free limit is taxed as an ETP at a concessional rate of 32% (below preservation age) or 17% (at or above preservation age, currently 60) — not your normal marginal rate.
Unused annual leave paid out as part of a genuine redundancy is taxed at the same concessional rate, not your full marginal rate.
Employers with fewer than 15 employees are exempt from the NES redundancy pay scale — though notice and leave payouts still apply regardless of employer size.
Your Award, Enterprise Agreement or contract may provide more than the NES minimum — you're entitled to whichever is higher.
Quick Answer
Redundancy pay under the NES ranges from 4 weeks (1–2 years of service) up to 16 weeks (9–10 years), before dropping to 12 weeks at 10+ years. A portion of a genuine redundancy payment is tax-free — $13,598 plus $6,801 per completed year of service for 2026–27 — with any excess taxed concessionally as an ETP at 32% (or 17% if you're 60 or over). On $2,000/week gross with 8 years of service, a genuine redundancy payout — including notice and leave — comes to about $36,160 after tax. Use the calculator above with your own figures, including age, for an exact result.
What Is Redundancy Pay?
Redundancy occurs when an employer no longer requires a position to be filled by anyone — the job is eliminated, not the person. This is legally and financially distinct from dismissal for performance or misconduct. The National Employment Standards (NES) under the Fair Work Act 2009 set minimum redundancy pay entitlements for most Australian employees, on top of notice and any accrued leave.
Genuine vs Non-Genuine Redundancy
A genuine redundancy means your job genuinely no longer exists — your employer doesn't need anyone to do that role, and you're under age pension age. If your employer hires someone into the same position shortly after you leave, the ATO may determine the redundancy wasn't genuine. A non-genuine redundancy includes dismissal because you've reached normal retirement age or are already at age pension age — these are still taxed as an ETP, but without the tax-free component that applies to genuine redundancies.
NES Redundancy Pay Scale
Years of Continuous Service
Minimum Redundancy Pay
Less than 1 year
Nil
1 year to under 2 years
4 weeks
2 years to under 3 years
6 weeks
3 years to under 4 years
7 weeks
4 years to under 5 years
8 weeks
5 years to under 6 years
10 weeks
6 years to under 7 years
11 weeks
7 years to under 8 years
13 weeks
8 years to under 9 years
14 weeks
9 years to under 10 years
16 weeks
10 years or more
12 weeks
ℹ️ The scale drops at 10+ years — this reflects that long-serving employees have typically accumulated long service leave entitlements, paid separately. Your Award, Enterprise Agreement or contract may provide more than the NES minimum.
Notice Period Requirements
Under the NES, minimum notice is 1 week for under 1 year of service, 2 weeks for 1–3 years, 3 weeks for 3–5 years, and 4 weeks for 5 or more years — plus an extra week if you're 45 or older with at least 2 years of service. Your employer can require you to work the notice period or pay you in lieu of notice instead.
The Redundancy Process — A Typical Timeline
While every redundancy is different, most follow a broadly similar sequence:
1
Redundancy decision
Employer decides the role is no longer needed.
2
Consultation
Employer notifies and consults affected employees, discussing alternatives where required.
3
Notice period
Formal notice is given — worked out, or paid in lieu, per the NES minimum or your contract.
4
Final day of employment
Your last day — employer should provide a written statement of your entitlements.
5
Final payment
Redundancy pay, notice pay, leave payout and any ETP are paid, usually with the final payslip.
6
Centrelink waiting period (if applicable)
If you apply for income support, Centrelink may apply a waiting period based on your termination payment — see the FAQ below for general guidance.
How Redundancy Pay Is Taxed
A genuine redundancy payment has two parts. The tax-free component is calculated as a base amount plus a fixed amount per completed year of service — for 2026–27, that's $13,598 + $6,801 × completed years. Anything above this limit is treated as an Employment Termination Payment (ETP), taxed concessionally at 32% if you're below preservation age, or 17% if you're at or above it (preservation age is currently 60 for most people). This concessional rate applies up to the smaller of the ETP cap ($270,000 for 2026–27) and the whole-of-income cap ($180,000) — amounts above that are taxed at the top marginal rate.
Annual Leave and Long Service Leave on Termination
Accrued annual leave must be paid out when your employment ends. If paid as part of a genuine redundancy, it's taxed at the same concessional rate as your ETP (32% or 17%) rather than your full marginal rate — a detail this calculator models directly. Long service leave is more complex in practice: leave accrued before 16 August 1978 has special concessional treatment (only 5% is assessable), while later accruals generally follow marginal or concessional rates depending on the circumstances. This calculator applies a simplified concessional treatment to LSL, disclosed in the assumptions panel above — for a large LSL balance, confirm the exact split with a tax agent.
Superannuation and Redundancy
Genuine redundancy payments themselves don't attract additional Superannuation Guarantee contributions — SG is paid on ordinary time earnings, not termination payments. However, any notice period worked (rather than paid in lieu) and any final ordinary pay still attract normal SG. See our Super Co-contribution Calculator or Super Withdrawal Calculator if you're considering how a redundancy payout fits your broader super position.
Who Qualifies (and the Small Business Exemption)
Most employees with at least 12 months of continuous service qualify for NES redundancy pay. Employers with fewer than 15 employees at the time of dismissal are exempt from the NES redundancy pay scale — if you worked for a small employer, you may not be legally entitled to the redundancy amounts in the scale above, though your contract, award or enterprise agreement may still provide for it. Notice period and accrued leave must still be paid regardless of employer size.
Worked Examples (2026–27)
Scenario
Redundancy (gross)
Tax-Free Limit
ETP Tax
3 years, $1,200/wk, age 30
$8,400 (7 wks)
$34,001
None — under limit
8 years, $2,000/wk, age 40
$28,000 (14 wks)
$68,006
None — under limit
12 years, $3,500/wk, age 50
$42,000 (12 wks)
$95,210
None — under limit
6 years, $2,500/wk, age 45, plus $40,000 ex-gratia
$67,500 (11 wks + ex-gratia)
$54,404
$4,191 on $13,096 taxable
Because the NES scale caps out at 12–16 weeks, most redundancy payments stay well under the tax-free limit on their own — ETP tax typically becomes relevant once an employer adds a larger ex-gratia payment or Award/EA entitlement above the NES minimum, as the fourth example shows. Use the calculator above with your own figures for an exact result.
Common Mistakes
Assuming redundancy pay is entirely tax-free. Only the amount up to the ATO's annual limit is tax-free — the rest is taxed as an ETP.
Assuming leave payouts are untaxed. Unused annual leave paid on genuine redundancy is taxed at the same concessional rate as the ETP, not zero.
Ignoring the effect of age. Reaching preservation age (60) significantly lowers the ETP tax rate from 32% to 17% — a material difference for anyone close to that threshold.
Using last year's tax-free figures. These amounts are indexed every 1 July — always confirm the current year's figures before relying on any number.
Assuming a small business employer owes the NES redundancy scale. Employers with fewer than 15 employees are exempt from the scale, though not from notice and leave payouts.
Frequently Asked Questions
Under the NES, redundancy pay is based on your years of continuous service, ranging from 4 weeks (1–2 years) up to 16 weeks (9–10 years), then dropping to 12 weeks for 10+ years. Your Award or contract may provide more.
It depends on your years of continuous service under the NES scale, or more if your Award, Enterprise Agreement or contract provides for it. Enter your details into the calculator above for an estimate.
Most employees with at least 12 months of continuous service at an employer with 15 or more employees. Employees of smaller businesses are generally exempt from the NES redundancy scale, though notice and leave payouts still apply.
Part is tax-free (a base amount plus a fixed amount per completed year of service). The remainder is taxed as an Employment Termination Payment at a concessional rate — 32% below preservation age, 17% at or above it — rather than your normal marginal rate.
A payment made because your job genuinely no longer exists — your employer doesn't need anyone to do that role — and you're under age pension age. If your position is refilled shortly after, the ATO may find it wasn't genuine.
Only on the portion above the tax-free limit ($13,598 + $6,801 per completed year of service for 2026–27). That excess is taxed as an ETP at a concessional rate, not your full marginal rate.
Yes — accrued annual leave is paid out separately from your redundancy pay and taxed at the same concessional rate as the ETP if paid as part of a genuine redundancy.
Yes, if you've accrued it — LSL is paid out on termination, with tax treatment depending on when it was accrued. This is genuinely complex; the calculator above applies a simplified concessional rate, disclosed in its assumptions.
Under the NES: 1 week for under 1 year of service, 2 weeks for 1–3 years, 3 weeks for 3–5 years, 4 weeks for 5+ years, plus an extra week if you're 45 or older with at least 2 years of service.
Yes — Centrelink treats redundancy and other termination payments as income for a waiting period calculation, which can delay access to JobSeeker or other income support depending on the amount received.
Partly — the tax-free component isn't taxed at all, while any amount above it is taxed concessionally as an ETP. Notice pay and leave payouts have their own tax treatment on top of this.
An Employment Termination Payment — a payment made because your employment ended that exceeds the genuine redundancy tax-free limit, taxed at a concessional rate up to the ETP cap.
32% if you're below preservation age, or 17% if you're at or above it (currently 60 for most people), up to the smaller of the ETP cap and whole-of-income cap. Amounts above that are taxed at the top marginal rate.
Your redundancy payment itself doesn't attract additional Superannuation Guarantee, since SG applies to ordinary time earnings, not termination payments. Any ordinary pay or worked notice up to your last day still attracts normal SG.
Genuine redundancy means your position no longer exists. Dismissal for performance, conduct or capability is legally different and doesn't attract redundancy pay entitlements or the tax-free treatment.
For most award and enterprise-agreement-covered employees, yes — employers must follow a consultation process, including notifying affected employees and discussing ways to avoid or minimise the redundancy.
Yes — if you believe your position wasn't genuinely made redundant, you may have grounds for an unfair dismissal application to the Fair Work Commission, generally within 21 days of dismissal.
The maximum amount of an ETP that receives concessional tax treatment — $270,000 for 2026–27 ($260,000 for 2025–26). Amounts above the smaller of this and the $180,000 whole-of-income cap are taxed at the top marginal rate.
Preservation age is the age you can access your super, currently 60 for most people. It matters for redundancy because it lowers your ETP concessional tax rate from 32% to 17% — a significant difference for anyone near that threshold.
No — only the amount up to the ATO's annual tax-free limit is tax-free. Any excess, plus notice pay and leave payouts, are taxed under their own rules, usually at a concessional rather than fully tax-free rate.
Generally no — casual employees typically aren't entitled to redundancy pay under the NES, since redundancy pay is designed around continuous, ongoing service that casual employment usually doesn't provide.
Yes — your employer can choose to pay you in lieu of notice instead of requiring you to work through the notice period, provided the payment reflects what you would have earned.
The redundancy payment itself isn't directly reduced by HECS, but a large payout can increase your total taxable income for the year, which may affect your compulsory HECS repayment when you lodge your tax return. This calculator doesn't currently model that interaction.
The Fair Entitlements Guarantee (FEG) is a government scheme that can cover unpaid redundancy pay, notice and leave entitlements (up to certain caps) if your employer becomes insolvent and can't pay. Contact Services Australia for details.
This calculator uses the ATO's current published tax-free amounts, ETP caps and concessional rates for 2026–27 and 2025–26, individually verified. Notice pay and long service leave use a disclosed simplifying assumption rather than their full real-world complexity. It's a planning estimate — for your exact entitlement and tax position, confirm with the Fair Work Ombudsman and a registered tax agent.
Redundancy pay under the NES depends on your years of service, with notice and leave paid on top — and each component has its own tax treatment. A genuine redundancy gives you a tax-free amount indexed annually by the ATO, with any excess, plus leave and notice, taxed concessionally rather than at your full marginal rate. Your age matters more than many people realise, since reaching preservation age materially lowers your tax rate on the taxable portion. Use the calculator above with your own figures for an accurate, year-specific estimate.