AU Redundancy Pay Calculator 2025 — Free NES Severance Estimator
Our free redundancy pay calculator Australia instantly works out your NES severance entitlement, genuine redundancy tax-free limit, notice pay, annual leave payout, and estimated net amount for FY 2025-26. Whether you've been made redundant or are planning a workforce restructure, enter your salary and years of service above to calculate your Australian redundancy payout in seconds.
What Is Redundancy Pay in Australia?
Redundancy pay — also called severance pay or retrenchment pay — is the financial compensation you receive when your employer permanently eliminates your job. Under the National Employment Standards (NES) in the Fair Work Act 2009, most Australian employees who have worked continuously for at least one year are entitled to redundancy pay calculated on their base weekly rate multiplied by a number of weeks determined by their length of service. This is a minimum entitlement; your Modern Award, enterprise agreement, or contract may provide more.
A genuine redundancy — the most favourable type for tax purposes — occurs when: (1) the employer no longer requires anyone to perform your job; (2) the employer has complied with consultation obligations in any applicable award or enterprise agreement; and (3) redeployment within the business or an associated entity was not reasonable. Where all three conditions are met, a portion of your redundancy payout is completely tax-free under ATO rules.
A non-genuine redundancy occurs when the dismissal is due to reaching normal retirement age, the employee is at age pension age (67) or older, or the role was not truly abolished. Non-genuine redundancy payments receive no tax-free component and are taxed entirely as an Employment Termination Payment (ETP) — a less favourable outcome.
How is redundancy pay different from notice pay? Redundancy pay and notice pay are two separate NES entitlements. Redundancy pay compensates for the permanent loss of your role. Notice pay — or payment in lieu of notice — compensates for the required warning period your employer must give (or pay out). Both must be included in your final pay alongside any accrued annual leave and, where applicable, long service leave.
Who Should Use This Redundancy Calculator?
This Australian redundancy pay calculator is built for anyone navigating the end of employment due to a role being abolished under the Fair Work Act. Typical users include:
- Employees being made redundant who want to verify their Fair Work redundancy entitlements before final pay is issued
- HR managers and payroll officers calculating redundancy costs and severance obligations for one or more employees
- Business owners planning a restructure who need to budget total termination costs including redundancy, notice, and leave
- Workers aged 45+ checking their additional one-week notice entitlement under the NES
- Employees with 10+ years of service understanding the 12-week cap and long service leave interaction
- Small business owners confirming whether the NES redundancy exemption applies to their headcount of fewer than 15 employees
- Tax advisers and accountants needing a quick ETP tax estimate and tax-free component breakdown for FY 2025-26
How to Use This Redundancy Pay Calculator
- Enter your annual salary — use your base salary only. Do not include bonuses, allowances, or superannuation. Redundancy pay is calculated on base rate of pay only under the NES.
- Enter years of continuous service — use decimals for part years (e.g. 3.5 = three and a half years). Continuous service includes paid leave but generally excludes periods of unauthorised unpaid leave.
- Enter your age at dismissal — used to calculate your notice entitlement (age 45+ bonus week) and to determine whether concessional ETP tax rates apply (preservation age 60).
- Enter unused annual leave days — all accrued but untaken annual leave must be paid out. The default leave loading of 17.5% applies if your award provides for it.
- Select genuine or non-genuine redundancy — genuine redundancy unlocks the ATO tax-free component. If unsure, select yes and review the notes in your result for guidance.
- Confirm employer size — if your employer has fewer than 15 employees, the NES redundancy pay exemption applies, though notice and leave payout still must be made.
- Click Calculate — view your full redundancy pay breakdown: NES weeks, notice pay, leave payout, tax-free amount, ETP tax, and estimated net payout.
NES Redundancy Pay Scale — Australia FY 2025-26
The table below shows the minimum redundancy pay entitlements under the Fair Work Act for national system employees. These are minimums — your award or agreement may provide higher entitlements.
| Continuous Service | Redundancy Pay (Weeks) | Example: $75,000 Salary | Example: $100,000 Salary |
|---|---|---|---|
| Less than 1 year | Nil | $0 | $0 |
| 1 year – less than 2 years | 4 weeks | $5,769 | $7,692 |
| 2 years – less than 3 years | 6 weeks | $8,654 | $11,538 |
| 3 years – less than 4 years | 7 weeks | $10,096 | $13,462 |
| 4 years – less than 5 years | 8 weeks | $11,538 | $15,385 |
| 5 years – less than 6 years | 10 weeks | $14,423 | $19,231 |
| 6 years – less than 7 years | 11 weeks | $15,865 | $21,154 |
| 7 years – less than 8 years | 13 weeks | $18,750 | $25,000 |
| 8 years – less than 9 years | 14 weeks | $20,192 | $26,923 |
| 9 years – less than 10 years | 16 weeks | $23,077 | $30,769 |
| 10 years or more | 12 weeks | $17,308 | $23,077 |
Notice Pay Scale — NES Australia
In addition to redundancy severance pay, your employer must give you written notice of termination or pay in lieu. The NES minimum notice periods are:
| Period of Continuous Service | Minimum Notice |
|---|---|
| Less than 1 year | 1 week |
| 1 year to less than 3 years | 2 weeks |
| 3 years to less than 5 years | 3 weeks |
| 5 years or more | 4 weeks |
| Age 45+ with 2+ years service (additional) | +1 week |
Genuine Redundancy Tax-Free Limit — Quick Reference 2025-26
Use this table to quickly look up your tax-free redundancy amount for FY 2025-26 based on completed years of service. Formula: $13,100 + ($6,552 × completed years).
| Completed Years of Service | Tax-Free Limit (FY 2025-26) |
|---|---|
| 1 year | $19,652 |
| 2 years | $26,204 |
| 3 years | $32,756 |
| 4 years | $39,308 |
| 5 years | $45,860 |
| 6 years | $52,412 |
| 7 years | $58,964 |
| 8 years | $65,516 |
| 9 years | $72,068 |
| 10 years | $78,620 |
| 12 years | $91,724 |
| 15 years | $111,380 |
| 20 years | $144,140 |
| 25 years | $176,900 |
| 30 years | $209,660 |
Worked Examples — Redundancy Pay Calculations Australia
Example 1 — 1.5 Years, $55,000
Example 2 — 5 Years, $90,000
Example 3 — 8 Years, $120,000
Example 4 — 12 Years, $160,000
Edge Cases and Exemptions — Australian Redundancy Law
Small business exemption (fewer than 15 employees): Employers with fewer than 15 employees at the time of dismissal are exempt from NES redundancy pay. The headcount includes all employees — full-time, part-time, and regular casual — plus those of any associated entities. However, notice pay and accrued leave payout remain mandatory. Some Modern Awards impose redundancy obligations on small businesses regardless.
Less than 12 months' continuous service: No NES redundancy pay applies. Employees who have served fewer than 12 months of continuous service are not entitled to severance pay under the Fair Work Act, regardless of employer size.
Age pension age: Employees at or above age pension age (currently 67) on the date of dismissal do not qualify for the genuine redundancy tax-free component. The full payment is taxed as an ETP.
Casual employees: Casuals employed on an irregular or intermittent basis have no continuous service and are generally not entitled to NES redundancy pay. Regular and systematic casuals may have entitlements under their Modern Award or enterprise agreement.
Fixed-term contracts: Where a fixed-term contract ends on its agreed date, the employee is generally not entitled to redundancy pay — the expiry of the contract is not a redundancy under the NES.
Serious misconduct: Employees terminated for serious misconduct are not entitled to notice pay but do retain their accrued leave payout entitlements. Redundancy pay also does not apply as the dismissal is not a redundancy.
When to Act — Redundancy Pay Deadlines and Penalties
Final pay timing: Your employer must pay all final entitlements — redundancy pay, notice pay, and leave payout — within 7 days of your last day or by your next regular pay date, whichever is earlier. Since January 2025, deliberate underpayment of employee entitlements is a criminal offence under the Closing Loopholes Act with significant penalties for employers.
Centrelink / JobSeeker waiting period: Redundancy pay creates an income maintenance period for Services Australia purposes. You will generally be unable to claim JobSeeker payments until this period has elapsed — it is calculated from your gross redundancy amount.
ETP 12-month rule: Genuine redundancy payments must be paid within 12 months of termination to receive concessional ETP tax treatment. Payments outside this window are taxed at full marginal rates unless the delay was caused by legal proceedings commenced within 12 months.
Unfair dismissal claims — 21-day deadline: You cannot lodge an unfair dismissal claim if your dismissal is a genuine redundancy. However, if you believe the redundancy was not genuine, you have just 21 days from the dismissal date to lodge a claim with the Fair Work Commission. Missing this deadline forfeits your right to claim.