Facing redundancy can feel overwhelming. You’re trying to work out what you’re owed, what’s taxable, and how to plan your next step - often all at once. A redundancy calculator gives you a clear estimate of your payout so you can make decisions with confidence.
In Australia, redundancy entitlements are set by national laws. While some Awards or Enterprise Agreements may offer more generous benefits, the National Employment Standards (NES) under the Fair Work Act 2009 (Cth) provide the baseline. In this guide, we’ll explain how redundancy is calculated, what typically gets taxed, and how to use a calculator step-by-step to work out your likely payout.
We’ll also flag special situations (like small business exemptions and insolvency) and the key documents to check before you sign anything. If you need tailored advice, we’re here to help you navigate the process so you can move forward with certainty.
What Is A Redundancy Calculator?
A redundancy calculator is a simple tool that estimates the amount you could receive if your employment ends due to a genuine redundancy. It usually asks for your base weekly pay and your continuous years of service, then applies the NES redundancy pay scale to give you a figure for the redundancy component.
Good calculators also prompt you to consider additional, separate amounts that might be paid at termination - for example, unused annual leave, long service leave (if applicable), and any payment in lieu of notice. These are not “redundancy pay” under the NES, but they are commonly paid at the same time and affect your total.
Keep in mind that calculators provide estimates. Your contract, Award or Enterprise Agreement may include extra benefits, eligibility rules or different calculation methods. If anything looks unclear or unexpected, it’s worth getting your paperwork reviewed before you accept an offer.
How Is Redundancy Pay Calculated In Australia?
Redundancy pay for eligible employees is set by the National Employment Standards (NES). The amount depends on your continuous service with the employer and your base rate of pay for your ordinary hours. Casuals and some other categories (for example, true small businesses with fewer than 15 employees) may be exempt from redundancy under the NES.
Here’s the NES redundancy pay scale (in weeks of base pay):
| Period of Continuous Service |
Redundancy Pay (Weeks) |
| At least 1 year but less than 2 years |
4 |
| At least 2 years but less than 3 years |
6 |
| At least 3 years but less than 4 years |
7 |
| At least 4 years but less than 5 years |
8 |
| At least 5 years but less than 6 years |
10 |
| At least 6 years but less than 7 years |
11 |
| At least 7 years but less than 8 years |
13 |
| At least 8 years but less than 9 years |
14 |
| At least 9 years but less than 10 years |
16 |
| At least 10 years |
12* |
*After 10 years’ service, the NES scale reduces to 12 weeks. Other entitlements (like long service leave) may still apply separately.
This is the national minimum. If your Award, Enterprise Agreement or contract sets out a more generous redundancy entitlement, you should receive the higher amount. For most private sector employees, there aren’t different state-based rules - the Fair Work Act applies nationally. Public sector roles are often covered by specific government instruments, which may use different formulas and sometimes provide additional benefits.
Remember, redundancy pay is separate from:
- Statutory or contractual notice (or an agreed payment in lieu of notice)
- Accrued but unused leave (annual leave, and in some cases long service leave)
- Other negotiated amounts (such as retention or ex gratia payments)
If you’re also working out the final amounts payable for leave or other components, it can help to review a broader guide to calculating final pay so you don’t miss anything.
What Gets Taxed In A Redundancy Payout?
Once you have your gross figures, the next question is tax. In Australia, different parts of a termination package can be taxed in different ways. A redundancy calculator won’t always capture the full tax impact, so it’s wise to speak with your accountant for personalised tax advice.
Genuine Redundancy Payments
Amounts that qualify as a “genuine redundancy payment” (as defined by tax law) may be tax-free up to a capped limit that is linked to your years of service. Amounts above that limit are generally taxed as part of an employment termination payment (ETP).
Employment Termination Payments (ETPs)
Components that don’t fall within the tax-free genuine redundancy cap (or that aren’t genuine redundancy at all) are usually taxed as ETPs. Different ETP caps and rates can apply depending on your age and other factors.
Accrued Leave
Accrued but unused annual leave and long service leave are typically taxed, though some concessional rates may apply. These amounts are separate from redundancy pay, and the withholding can be different from your normal salary.
Superannuation On Termination
Generally, redundancy pay itself doesn’t attract superannuation, but some other components might. For more detail on how super applies, see our guide on superannuation on termination payments.
Because tax rules change and thresholds are updated, treat the figures you get from a calculator as estimates only. For clarity on your specific position, a quick chat with your accountant can save surprises later.
Step-By-Step: Calculate Your Redundancy Payment
Working through the process step-by-step can make everything much easier. Here’s a simple approach you can follow alongside a redundancy calculator.
1) Check Your Eligibility
- Under the NES, many employees are eligible for redundancy pay, but casual employees and some other categories (including employees of “small business employers” with fewer than 15 employees) are generally excluded.
- Public sector and government roles are often covered by separate instruments. If you’re in the public sector, check your Department’s policy or Enterprise Agreement.
2) Gather Your Key Details
- Your base weekly pay (exclude overtime, loadings, allowances, bonuses and commissions unless your instrument says otherwise)
- Your continuous years of service (rounding rules may be set by your instrument)
- Any Award, Enterprise Agreement or contract clauses that provide above-minimum redundancy benefits
3) Apply The NES Redundancy Scale
- Use the table above to find the weeks of redundancy pay that match your continuous service.
- Multiply those weeks by your weekly base rate to estimate the gross redundancy component.
4) Add Other Termination Amounts
- Include accrued annual leave and any long service leave you’re entitled to be paid out.
- Consider whether payment in lieu of notice is being offered or required.
- Account for any ex gratia or voluntary redundancy incentive amounts agreed with your employer.
5) Estimate Tax Withholding
- Separate your genuine redundancy component (potentially tax-free up to a cap), any ETP amount, and your leave payouts.
- Use a calculator to estimate withholding, then confirm with your accountant for accuracy.
If your employer provides a breakdown that doesn’t match your calculations, ask for a detailed statement. It’s reasonable to request a clear summary of how each component has been worked out and how tax has been applied. Where needed, you can also request an employment separation certificate for Services Australia.
Special Situations And Legal Issues To Watch
Redundancy situations can raise a handful of legal issues. Here are common ones to keep on your radar.
Genuine Redundancy Versus Termination
Redundancy should be “genuine” under the Fair Work Act - meaning your employer no longer requires your job to be performed by anyone and has met any consultation obligations in your instrument. If you’re unsure whether your situation is a redundancy or a different kind of termination, our Q&A on the difference between redundancy and termination is a helpful starting point.
Small Business Exemption
Employers with fewer than 15 employees are generally exempt from redundancy pay under the NES, though you’ll still be entitled to unused leave and other agreed amounts. Your contract or an Enterprise Agreement could still provide redundancy pay even if the NES doesn’t require it.
Public Sector And Enterprise Agreements
Public sector redundancies and some private workplaces covered by Enterprise Agreements may use different formulas or offer additional benefits. Use a calculator for a baseline, but always check the instrument that applies to you.
Voluntary Redundancy Packages
Voluntary redundancy may include incentives or retention payments. These are typically in addition to the NES minimum and can be taxed differently. Make sure you can see each component listed separately in your employer’s breakdown.
Employer Insolvency (FEG)
If your employer goes into liquidation and can’t pay, the Government’s Fair Entitlements Guarantee (FEG) may cover certain unpaid amounts (subject to eligibility). FEG has separate rules about what’s covered and how it’s calculated. Keep copies of your contract, payslips and correspondence - they’re useful for any claim.
Leave And Sick Leave Questions
If you’re weighing up how leave interacts with redundancy timelines, it can help to read about related topics such as annual leave payments and how redundancy and sick leave are typically handled around termination dates.
Deeds And Settlement Documents
Some employers offer a deed in exchange for finalising your package (for example, a confidentiality clause or a mutual release). Don’t feel rushed. If you’re presented with a deed, our guide to a deed of release and settlement explains what to look for before you sign.
Super, Notice And Final Pay
It’s common to have questions about whether super applies, how notice is treated, and how the final pay is put together. These areas can materially affect your net figure, so it’s worth cross-checking against resources on superannuation on termination payments and final pay.
Key Takeaways
- For most private sector employees in Australia, redundancy entitlements come from the National Employment Standards - your years of service and base weekly pay drive the core calculation.
- Use a redundancy calculator to estimate the NES component, then add other amounts like accrued leave and any payment in lieu of notice to see your total.
- Tax treatment depends on the component: part of a genuine redundancy may be tax-free up to a cap, while excess amounts and some other payments are taxed (often as ETPs). Confirm the numbers with your accountant.
- Check your Award, Enterprise Agreement or contract - if they provide more generous redundancy pay than the NES, you should receive the higher amount.
- Public sector roles, voluntary redundancies and employer insolvency (FEG) can change how your payout is calculated or paid, so review the instrument and keep clear records.
- Before accepting a package or signing a deed, ask for an itemised breakdown and make sure you understand super, notice, leave and tax across the whole final pay.
If you’d like a consultation on redundancy calculations, termination documents or to review a proposed redundancy deed, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
