Redundancy Pay Calculator
Estimates redundancy payouts based on years of service, a critical tool during corporate layoffs.
Quick Use Samples
Service & Pay Details
Enter the number of full years you have worked.
Redundancy Pay Estimate
For 6 years of service, your minimum entitlement is 11 weeks pay, totaling $19,800.00. Of this, an estimated $19,800.00 is tax-free. The remainder is taxed at a concessional rate. Check your award or agreement for more generous entitlements.
Payout Breakdown
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What is Redundancy Pay?
Redundancy pay, also known as severance pay, is a payment made to an employee who is made redundant. In Australia, it is a minimum entitlement under the National Employment Standards (NES) for most employees. It is designed to compensate for the loss of a job when an employer no longer requires the employee's role to be performed by anyone.
Behind the Formula
The amount of redundancy pay is based on a sliding scale determined by the employee's years of continuous service. The scale starts at 4 weeks' pay for at least 1 year of service and increases up to a maximum of 16 weeks' pay for 9 years of service. An interesting feature of the NES scale is that the entitlement reduces to 12 weeks for 10 or more years of service, as it is assumed long-serving employees have had access to long service leave.
Expert Insights
- Not everyone is entitled to redundancy pay. Employees of a small business (fewer than 15 employees), short-term casuals, and employees on fixed-term contracts are generally not eligible under the NES.
- Your award, enterprise agreement, or employment contract can provide for a more generous redundancy payment than the NES minimum. Always check these documents.
- A 'genuine redundancy' has a specific legal meaning. A redundancy is not genuine if the employer has not followed their consultation obligations or if it would have been reasonable to redeploy the employee to another role within the business.
Actionable Tips
- If you are made redundant, ensure you receive your full entitlements. This includes redundancy pay, any outstanding wages, payment in lieu of notice, and your accrued annual leave.
- Seek financial advice. A redundancy payment is often a large lump sum, and it's important to have a plan for how you will manage it to cover your expenses while you look for a new job.
- Explore your options for redeployment. If there is another suitable position within the business, your employer may have an obligation to offer it to you.
Real-World Examples
A mid-career employee
An employee with 6 years of continuous service is made redundant. Under the NES, they are entitled to 11 weeks of redundancy pay.
A long-serving employee
An employee with 12 years of service is made redundant. Their entitlement under the NES is 12 weeks' pay.
A small business employee
An employee at a small business with only 10 staff is made redundant. They are not entitled to a statutory redundancy payment under the NES.
Glossary of Terms
Redundancy
A situation where an employer no longer requires an employee's job to be done by anyone, leading to the termination of their employment.
Continuous Service
An unbroken period of employment with a single employer, which is used to calculate redundancy pay.
Redeployment
The process of offering an employee whose role is redundant an alternative suitable position within the same business or an associated entity.