Made redundant? What you’re owed and how it’s taxed
Updated 26 September 2026 · figures from the ATO and official sources
If your job no longer exists and your employer has 15 or more staff, you’re entitled to redundancy pay under the National Employment Standards (NES). Your award, agreement or contract may give you more.
What you’re owed
| Years of service | Weeks of redundancy pay |
|---|---|
| Under 1 | 0 |
| 1 to under 2 | 4 |
| 2 to under 3 | 6 |
| 3 to under 4 | 7 |
| 4 to under 5 | 8 |
| 5 to under 6 | 10 |
| 6 to under 7 | 11 |
| 7 to under 8 | 13 |
| 8 to under 9 | 14 |
| 9 to under 10 | 16 |
| 10 or more | 12 |
It drops to 12 weeks at 10 years because long service leave usually kicks in. You’re also owed notice (1 to 4 weeks, plus one if you’re over 45 with 2+ years of service), often paid out instead of worked, and all unused annual leave.
How it’s taxed
For a genuine redundancy, redundancy pay and pay in lieu of notice are tax-free up to $13,598 plus $6,801 for each completed year of service in 2026–27. Anything above that is an employment termination payment, taxed at 32% if you’re under 60 and 17% if you’re 60 or over. Unused annual leave is taxed at a maximum of 32%.
Worked examples
| Situation (age 45, 3 weeks leave) | Total | Tax-free | Tax | In your bank |
|---|---|---|---|---|
| 2 years, $1,400/week | $16,135 | $11,200 | $1,579 | $14,556 |
| 5 years, $1,800/week | $29,745 | $23,400 | $2,030 | $27,715 |
| 9 years, $2,200/week | $51,755 | $44,000 | $2,482 | $49,273 |
Before you sign anything
- Check the redundancy is genuine: your role is no longer needed and you weren’t offered suitable redeployment.
- Check your award or agreement for more than the NES minimum.
- Super is paid on pay in lieu of notice, but not on redundancy pay or unused annual leave.
- If something seems wrong, contact the Fair Work Ombudsman on 13 13 94.
General information only, not financial or tax advice. See our disclaimer.