Redundancy Pay Calculator
Calculate your redundancy payout: tax-free genuine redundancy amount, ETP (Employment Termination Payment) tax, unused leave and notice entitlements. Know exactly what you should receive and how much tax applies. Rates: 2024-25 indexed.
Employment details
Your base salary before tax — used to derive weekly rate and marginal tax.
Weekly rate: $1,635 · Approx. marginal rate (incl. Medicare): 32%
Decimal allowed (e.g. 4.5). Tax-free amount uses complete years only (5 yr).
Age 55+ qualifies for the lower 17% ETP concessional rate (under 55 is 32%).
ETP rate: 32% (under 55)
Redundancy type
Genuine redundancy qualifies for a tax-free amount. Non-genuine (e.g. resignation, directed dismissal, or less than 12 months service) does not — the full amount is taxed as an ETP.
Payment amounts
Enter the dollar amounts for each component of your redundancy package. Leave fields at $0 if not applicable.
The core redundancy component. The tax-free amount is deducted from this; any remainder becomes an ETP.Fair Work minimum: $16,346 (10 wks).
Taxed at your marginal rate. Not an ETP.
LSL accrued after August 1978 is taxed at marginal rate. Pre-1978 accruals have different rates.
Taxed at your marginal rate — treated as ordinary income. Not an ETP.
How the tax-free amount is calculated
The ATO indexes these limits annually via AWOTE. Figures shown are 2024-25 indexed. The ETP cap is $245,000 and the whole-of-income cap is $180,000 — both indexed annually.
Fair Work Minimum Entitlement
Minimum redundancy pay scale under the Fair Work Act 2009 (s.119). Applies to most national system employees. Small businesses (under 15 employees) are exempt.
| Years of service | Min. weeks | Est. value |
|---|---|---|
| 1 year | 4 wks | $6,538 |
| 2 years | 6 wks | $9,808 |
| 3 years | 7 wks | $11,442 |
| 4 years | 8 wks | $13,077 |
| 5 yearsYour entitlement | 10 wks | $16,346 |
| 6 years | 11 wks | $17,981 |
| 7–9 years | 13 wks | $21,250 |
| 10+ years | 16 wks | $26,154 |
Your Fair Work minimum: $16,346 (10 weeks pay)
For 5 complete years of service at $85,000 p.a. ($1,635/wk). This is the minimum redundancy component only — unused leave and notice are additional entitlements.
Note: Award-covered employees may have different scales. State government employees and some other categories may not be covered by the national system. Always verify with Fair Work Australia.
Tax tips for redundancy
- Consider making a voluntary super contribution before your termination date — you can salary sacrifice unused leave or other entitlements to reduce your taxable income this year.
- If you have a HECS/HELP debt, the genuine redundancy tax-free amount does not count toward your repayment income, so it won't trigger compulsory repayments.
- ETP concessional rates (17%/32%) are generally more favourable than your normal marginal rate. The tax your employer withholds is provisional — you may get a refund or owe a small amount at tax time.
- A large redundancy package in one financial year may push other income into a higher bracket. Consider timing your termination date if you are close to 30 June.
- Redundancy payments can affect Centrelink waiting periods. Report the full amount — Centrelink uses an income maintenance period based on the value of leave and redundancy.
- If you believe your redundancy is not genuine (e.g. the role still exists or was filled by someone else), the tax-free amount does not apply and you should seek advice.
What to do next
- Compare your offer against the Fair Work minimum entitlement table above.
- Confirm all unused leave and notice entitlements are included in the written offer.
- Negotiate — packages frequently exceed the minimum, especially for long-serving employees.
- Contact Fair Work Australia (1300 799 675) if you believe the redundancy payment is below minimum.
- Lodge your tax return — your employer withholds tax but your final liability may differ based on all income for the year.
- Seek independent financial advice — redundancy can affect super, Centrelink, and your overall financial position.
Net payout after tax
$0
After all tax · Gross: $0
Payment breakdown
| Component | Gross | Tax | Net |
|---|---|---|---|
| Total | $0 | $0 | $0 |
Enter payment amounts above to see the breakdown.
ETP tax rates (2024-25 indexed)
ETP rates include Medicare levy. Caps are indexed annually. The whole-of-income cap applies per income year — previous ETPs received during the same year reduce the available cap.
What is a genuine redundancy in Australia?
A genuine redundancy occurs when your job no longer exists — your employer has decided they no longer need your role to be performed by anyone, and they have complied with any consultation obligations in an applicable modern award or enterprise agreement. The ATO grants a significant tax-free amount on genuine redundancy payments, comprising a base amount plus an additional component for each complete year of service. This threshold is indexed annually to Average Weekly Ordinary Time Earnings (AWOTE). Non-genuine redundancies — such as directed dismissal, reaching retirement age, or resignation — do not qualify for the tax-free amount.
How is redundancy pay taxed in Australia?
Redundancy packages are split into components with different tax treatment. The genuine redundancy tax-free amount is received completely tax-free. The remaining redundancy component is an Employment Termination Payment (ETP) — taxed at a concessional rate of 17% (if you are 55 or older at the end of the income year) or 32% (under 55) on amounts up to the whole-of-income cap ($180,000 in 2024-25). Amounts over that cap are taxed at 47%. Unused annual leave and long service leave are taxed at your ordinary marginal rate, as is payment in lieu of notice.
What is the Fair Work minimum redundancy entitlement?
Under the Fair Work Act 2009 (s.119), most national system employees are entitled to a minimum redundancy payment based on years of continuous service. Entitlements range from 4 weeks pay (1 year of service) up to 16 weeks pay (10 or more years). Small businesses with fewer than 15 employees are generally exempt. The entitlement is calculated at the employee's ordinary base rate of pay, not including overtime, allowances, or bonuses.
Can I reduce tax on a redundancy payout?
There are several legitimate strategies to consider. Making a voluntary super contribution before your termination date (salary sacrificing unused leave or other entitlements) can reduce your assessable income for the year. The timing of your final day relative to 30 June can also affect which financial year the payment falls in. The tax-free genuine redundancy amount is excluded from HECS/HELP repayment income calculations. Always consult a registered tax adviser or financial planner before making decisions about structuring your redundancy payout.