How Much Redundancy Pay Am I Entitled To? (2025-26 Guide)
Calculate your redundancy pay entitlements in Australia. NES redundancy pay ranges from 4 to 16 weeks based on years of service. Use our free calculator.
NES redundancy pay scale
Under the National Employment Standards (NES), if your position is made redundant, you are entitled to a redundancy payment based on your continuous years of service with your employer. The scale is: 1-2 years = 4 weeks, 2-3 years = 6 weeks, 3-4 years = 7 weeks, 4-5 years = 8 weeks, 5-6 years = 10 weeks, 6-7 years = 11 weeks, 7-8 years = 13 weeks, 8-9 years = 14 weeks, and 9-10 years = 16 weeks. After 10 years of service, the entitlement drops back to 12 weeks. Employees with less than 12 months of continuous service are not entitled to NES redundancy pay. These are minimum entitlements — your award, enterprise agreement, or contract may provide more generous terms.
Small business exemption
If your employer is a small business (fewer than 15 employees at the time of termination), they are exempt from paying NES redundancy pay. This is one of the most important exceptions to understand. The employee count includes all employees of the business, including casual employees who are employed on a regular and systematic basis. It also includes employees of associated entities (related companies). However, a small business employer may still be required to pay redundancy under an applicable Modern Award or enterprise agreement, even if the NES exemption applies. If your employer recently grew past 15 employees, only your service from the date the business exceeded 15 employees counts toward the redundancy calculation.
What counts as continuous service?
Continuous service means the period of unbroken employment with the same employer. It includes periods of paid leave (annual leave, personal leave, long service leave), unpaid leave authorised by the employer, unpaid parental leave (up to the first 12 months), and time stood down. It does not include unauthorised absences or unpaid leave that is not authorised. If your employer's business was sold or transferred and you moved to the new employer, your service with the previous employer typically counts as continuous service with the new owner under the transfer of business provisions in the Fair Work Act. Breaks caused by genuine redundancy followed by re-employment with the same employer may restart the clock.
Genuine redundancy and tax-free thresholds
A genuine redundancy occurs when the employer no longer requires anyone to perform your job, the employer has complied with consultation requirements in any applicable award or agreement, and it would not have been reasonable to redeploy you within the business or an associated entity. If your redundancy meets these criteria, part of your payout is tax-free. For 2025-26, the tax-free limit is a base amount of $12,524 plus $6,264 for each completed year of service. For example, with 5 completed years of service, the tax-free portion is $12,524 + (5 x $6,264) = $43,844. Amounts above this threshold are taxed at your marginal rate (with a possible concessional rate if they are within certain caps). This tax-free treatment does not apply if you are over preservation age.
What else are you owed on redundancy?
Redundancy pay is not the only payment you are entitled to when made redundant. You should also receive: payment for your minimum notice period (or payment in lieu of notice if you are asked to leave immediately), payment for all accrued but untaken annual leave (including leave loading if applicable under your award), accrued long service leave (if eligible under your state or territory legislation), any outstanding wages for hours already worked, and any other entitlements owed under your award or enterprise agreement such as rostered days off. Your employer must pay all final amounts within 7 days of termination, or on the next regular pay day, whichever is sooner. Request an itemised final pay slip to verify everything is correct.
Can a redundancy be contested?
If you believe your redundancy was not genuine — for example, if your role was actually filled by someone else, or the employer did not follow proper consultation procedures — you may be able to make an unfair dismissal claim with the Fair Work Commission. You have 21 days from the date of termination to lodge an application. A redundancy is not genuine if the employer could have reasonably redeployed you to another position within the business or an associated entity. Additionally, if the employer did not comply with the consultation obligations in your Modern Award or enterprise agreement before making you redundant, it may fail the genuine redundancy test. This does not automatically mean you win an unfair dismissal claim, but it removes the genuine redundancy defence.
How to calculate your redundancy pay
To calculate your redundancy payment, multiply your number of weeks' entitlement (from the NES scale above) by your base weekly pay rate. Your base rate of pay is your ordinary hourly rate multiplied by your standard hours (usually 38 for full-time). It does not include overtime, penalty rates, allowances, or bonuses. For example, if you earn $30 per hour, your base weekly pay is $30 x 38 = $1,140. With 6 years of service, you are entitled to 11 weeks, so your redundancy pay is $1,140 x 11 = $12,540. Part-time employees calculate on their part-time hours. Use our Redundancy Pay Calculator to get a precise figure based on your specific situation, including an estimate of the tax-free component.
Try these free tools
Official resources
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
Related articles
Understand notice periods in Australia. NES minimum notice ranges from 1 to 5 weeks based on service and age. Learn about employer and employee obligations.
Unfair Dismissal in Australia: How to Know If You Have a CaseWas your dismissal unfair? Learn the eligibility rules, 21-day deadline, high income threshold ($175,000), remedies, and how to apply to the Fair Work Commission.