Under the National Employment Standards, redundancy pay starts at 4 weeks' pay after one year of continuous service and rises to 16 weeks' pay at nine years, then drops to 12 weeks at 10 years. It is paid at your base rate for ordinary hours. To get it you generally need at least 12 months of continuous service with an employer that has 15 or more employees.
An award, enterprise agreement or company policy may give you more than this minimum.
Who is entitled to redundancy pay?
The Fair Work Ombudsman says you may be entitled to redundancy pay if you have at least one year of continuous service with your employer, you are covered by the national workplace relations system and your employer employs at least 15 people.
Unpaid leave doesn't count towards continuous service for redundancy pay, and it doesn't break your service either.
How much redundancy pay do you get under the NES?
This is the NES minimum for employers other than small businesses, as published by the Fair Work Ombudsman, as at October 2026.
| Period of continuous service | Redundancy pay |
|---|---|
| At least 1 year but less than 2 years | 4 weeks |
| At least 2 years but less than 3 years | 6 weeks |
| At least 3 years but less than 4 years | 7 weeks |
| At least 4 years but less than 5 years | 8 weeks |
| At least 5 years but less than 6 years | 10 weeks |
| At least 6 years but less than 7 years | 11 weeks |
| At least 7 years but less than 8 years | 13 weeks |
| At least 8 years but less than 9 years | 14 weeks |
| At least 9 years but less than 10 years | 16 weeks |
| At least 10 years | 12 weeks |
The drop from 16 weeks to 12 at 10 years is how the scale is written.
What counts as a week's pay for redundancy?
Redundancy pay is paid at your base pay rate for your ordinary hours of work. It leaves out bonuses and other incentive payments, loadings, allowances, overtime and penalty rates.
If your package leans on a bonus, the weeks are counted on base pay alone.
What else is paid out when you are made redundant?
Redundancy pay comes on top of the rest of your final pay, including wages owing and any unused annual leave and long service leave.
You are also entitled to notice. This is the NES minimum, as published by the Fair Work Ombudsman as at October 2026.
| Period of continuous service | Minimum notice period |
|---|---|
| 1 year or less | 1 week |
| More than 1 year but not more than 3 years | 2 weeks |
| More than 3 years but not more than 5 years | 3 weeks |
| More than 5 years | 4 weeks |
Employees over 45 get an extra week if they have at least 2 years of continuous service. Your employer can have you work the notice or pay it out. A payout must equal the full amount you would have earned working it, including bonuses, loadings, allowances, overtime and penalty rates, and it must be paid on or before your last day.
How do you calculate redundancy pay?
Say you are 38, on a base salary of $104,000 and you have been with a large employer for 6 years and 3 months. Your base pay is $2,000 a week.
Redundancy pay at 6 years of service is 11 weeks, so $22,000.
Notice for more than 5 years of service is 4 weeks. If your employer pays it out, that is at least another $8,000, plus your unused leave and final wages. Had you been 46, the notice would be 5 weeks. The Fair Work Ombudsman's Notice and Redundancy Calculator runs the same sums against your award.
Who doesn't get redundancy pay?
Under the NES you don't get redundancy pay if you
- have less than 12 months of continuous service with your employer
- were employed for a specific period of time, project or season
- were terminated for serious misconduct
- are a casual employee
- are a trainee employed only for the length of the training arrangement
- are an apprentice.
Most small businesses with fewer than 15 employees don't have to pay NES redundancy pay, with exceptions for some insolvent employers and some industry schemes.
What makes a redundancy genuine?
A redundancy is genuine when your job no longer needs to be done by anyone because of changes in the business, and your employer followed the consultation requirements in your award or enterprise agreement. It isn't genuine if the employer still needs someone to do the job or could reasonably have given you another job in the business.
A genuine redundancy can't be challenged as unfair dismissal. If yours wasn't genuine, you may be able to apply to the Fair Work Commission within 21 days of the dismissal.
Is redundancy pay taxed?
The ATO says a genuine redundancy payment is tax-free up to a limit that depends on your years of service and is indexed every 1 July. Anything above it is taxed as an employment termination payment.
Can an employer reduce your redundancy pay?
Only through the Fair Work Commission, and only for NES redundancy pay. An employer can apply to have it reduced if it finds you other acceptable employment or can't afford the full amount. Redundancy pay set by an award or enterprise agreement can't be reduced this way.
This is general information, not legal or financial advice.
Sources
- Fair Work Ombudsman, Redundancy pay (eligibility, the NES scale, base rate, payouts, reducing redundancy pay, the Notice and Redundancy Calculator)
- Fair Work Ombudsman, Who doesn't get redundancy pay
- Fair Work Ombudsman, Redundancy (genuine redundancy)
- Fair Work Ombudsman, Dismissal (the NES notice table, the extra week for over 45s, payment in lieu of notice)
- Fair Work Ombudsman, Final pay (what is paid out and when)
- Fair Work Ombudsman, Unfair dismissal (the 21-day deadline)
- Australian Taxation Office, Genuine redundancy payments (last updated 5 June 2026)
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