NES redundancy pay
| Continuous service | Redundancy pay |
|---|---|
| Less than 1 year | Nil |
| 1 to < 2 years | 4 weeks |
| 2 to < 3 years | 6 weeks |
| 3 to < 4 years | 7 weeks |
| 4 to < 5 years | 8 weeks |
| 5 to < 6 years | 10 weeks |
| 6 to < 7 years | 11 weeks |
| 7 to < 8 years | 13 weeks |
| 8 to < 9 years | 14 weeks |
| 9 to < 10 years | 16 weeks |
| 10 years or more | 12 weeks |
Paid at your base rate for ordinary hours. Small businesses (fewer than 15 employees) are exempt.
Notice
| Service | Notice |
|---|---|
| 1 year or less | 1 week |
| Over 1 to 3 years | 2 weeks |
| Over 3 to 5 years | 3 weeks |
| Over 5 years | 4 weeks |
| Over 45 years old with 2+ years | +1 week |
Tax-free limit
| Income year | Base amount | Per completed year | ETP cap |
|---|---|---|---|
| 2026-27 | $13,598 | $6,801 | $270,000 |
| 2025-26 | $13,100 | $6,552 | $260,000 |
A genuine redundancy payment (redundancy pay, pay in lieu of notice and any extra severance) is tax-free up to the limit. The rest is an employment termination payment taxed at 32% (17% from preservation age, 60) up to the ETP cap, and 47% above it. Unused annual leave paid because of a genuine redundancy is taxed at 32% at most. Ordinary final pay is taxed normally.
Default example
6 years’ service, $1,800 a week, age 42: 11 weeks’ redundancy pay ($19,800) plus 4 weeks’ notice ($7,200) = $27,000, all within the $54,404 tax-free limit. Plus 76 hours of annual leave ($3,600, taxed $1,152). Take-home: $29,448.
FAQ
How many weeks of redundancy pay do I get?
Under the NES: 4 weeks after 1 year, rising to 16 weeks at 9–10 years, then 12 weeks from 10 years. Your award or agreement may give more.
How much redundancy pay is tax-free in 2026-27?
$13,598 plus $6,801 for each completed year of service. With 6 years that is $54,404.
What is my payout with 6 years at $1,800 a week?
About $29,448 after tax, including 4 weeks’ notice in lieu and 76 hours of annual leave.
Do small businesses have to pay redundancy?
No NES redundancy pay is required if the employer has fewer than 15 employees, but notice and accrued leave must still be paid.
Sources (checked 5 November 2026): Fair Work Act 2009 s 117 (notice) and s 119–121 (redundancy pay, small business exemption); Fair Work Ombudsman redundancy pay and notice pages; ATO “Key superannuation rates and thresholds — employment termination payments” (2026-27: $13,598 + $6,801, ETP cap $270,000; 2025-26: $13,100 + $6,552, $260,000); ATO “Genuine redundancy payments” and “Unused leave on termination”.