Redundancy Pay Calculator — Australia (NES & Tax) 2026
NES redundancy weeks, notice in lieu, unused leave with loading, the 2026–27 tax-free genuine redundancy limit, ETP tax at 32% or 17% and the estimated net redundancy payout.
| Weekly pay | — |
|---|---|
| NES redundancy pay | — |
| Contract / EBA severance | — |
| Notice in lieu | — |
| Unused leave (annual + LSL) | — |
| Tax-free genuine redundancy amount | — |
| ETP (taxable part) and tax | — |
| Tax on unused leave (32%) | — |
| Estimated net payout | — |
In short
An Australian employee made redundant by a business with 15+ staff gets NES redundancy pay of 4 to 16 weeks by years of service (12 weeks after 10 years), 1–4 weeks’ notice (one more if over 45) and all unused leave; in 2026–27 the first $13,598 plus $6,801 per completed year is tax-free, the rest is an ETP taxed at 32% (17% from age 60) up to $270,000, and unused leave is withheld at 32% — $95,000 salary after 7 completed years (13 weeks) gives about $39,325 gross and $34,341 net.
Who this is for: Employees facing redundancy who want their entitlements and the tax on them, and employers costing a restructure.
Redundancy pay and tax in Australia
Under the National Employment Standards an employee made redundant by a business with 15 or more staff receives redundancy pay on a scale from 4 weeks (1–2 years) to 16 weeks (9–10 years), falling to 12 weeks after 10 years because long-service leave takes over, plus notice of 1–4 weeks (one more if over 45 with two years' service) paid in lieu if not worked, plus all unused annual leave with loading and long-service leave. Awards, enterprise agreements and contracts often add more.
Tax follows three rules. A genuine redundancy payment is tax-free up to $13,598 plus $6,801 for every completed year of service (2026–27). Anything above that, together with notice in lieu, is an employment termination payment taxed at 32% (17% if you have reached preservation age 60) up to the $270,000 cap and 47% beyond. Unused leave paid out on redundancy is withheld at a flat 32%. The calculator applies each in turn and estimates the net amount.
See also: Annual Leave Payout Calculator — Australia, Australian Income Tax Calculator 2026–27, Superannuation Calculator 2026–27, Pay Calculator Australia 2026–27.
Assumptions
- Weekly pay = salary ÷ 52; NES weeks by completed years (s 119); notice weeks by service (s 117) plus one week if over 45 with 2+ years.
- Tax-free limit = $13,598 + $6,801 × completed years (2026–27); excess severance and notice in lieu are an ETP taxed at 32% (17% from 60) to the $270,000 cap and 47% above.
- Unused annual leave at daily rate × days + 17.5% loading; LSL at weekly rate; both withheld at 32%.
- Small business exemption applied when selected; the whole-of-income cap and pre-1993 leave rules are not modelled.
Worked example
Weekly pay $1,827. NES redundancy for 7 completed years = 13 weeks = $23,750; notice 4 weeks + 1 (over 45) = $9,135; leave 15 days + 17.5% = $6,440. Tax-free limit $13,598 + 7 × $6,801 = $61,205, so all $23,750 of severance is tax-free. ETP = notice $9,135 at 32% = $2,923; leave tax 32% = $2,061. Gross $39,325, net about $34,341.
Frequently asked questions
Is redundancy pay tax-free?
Up to $13,598 plus $6,801 per completed year of service in 2026–27 for a genuine redundancy; the rest is an ETP taxed at concessional rates.
Do small businesses have to pay redundancy?
No — employers with fewer than 15 employees are exempt from NES redundancy pay, though awards can override this and notice and leave are still owed.
Is super paid on redundancy pay?
No. Super is payable on notice in lieu and on ordinary hours worked, not on redundancy pay or unused leave payouts.
What is preservation age?
60 for anyone born after 30 June 1964; ETPs received at or above it are taxed at 17% instead of 32% within the cap.
Does the tax-free limit apply if I am 67?
No — a payment made at or after pension age is not a genuine redundancy payment for tax purposes and is taxed as an ETP.
How is unused annual leave taxed?
Withheld at 32% when paid because of genuine redundancy or invalidity; at marginal rates on resignation.
What if my award gives more redundancy pay?
The award or agreement amount applies if it is higher than the NES; the tax-free limit and ETP rules are the same.
Can I salary-sacrifice a redundancy payment into super?
Not the redundancy pay itself (it is not ordinary-time earnings); you can make a personal deductible contribution within the concessional cap instead.
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