Redundancy Pay in Australia: The NES Scale, Who Misses Out, and How It Is Taxed

By Salary Calculator Australia Editorial Team ยท November 2026

If your job is made redundant in Australia, the minimum payout is set by the National Employment Standards (NES). It is based on your years of continuous service with the employer, and it is paid in weeks of your base pay rate for ordinary hours, not including overtime, penalty rates or allowances.

To turn the weeks below into a dollar figure for your own wage, a redundancy pay calculator does the maths in one step. This guide covers the rules behind the number, including the cases where nothing is owed at all.

The NES redundancy pay scale

The drop at 10 years is not a typo. It exists because long-service leave entitlements usually begin around that point.

Who is not covered by NES redundancy pay

Your award, enterprise agreement or contract can give you more than the NES, but never less.

Worked example

Anna earns a base rate of $1,600 a week for her ordinary hours and has worked for the same medium-sized employer for 6 years and 4 months. Her NES entitlement is 11 weeks:

How redundancy pay is taxed

If the redundancy is genuine (the job no longer exists, and you are under Age Pension age), part of the payment is tax-free. The tax-free limit is a base amount plus an amount for each completed year of service, and the ATO indexes both figures every 1 July.

Anything above the tax-free part is treated as an employment termination payment (ETP), which is taxed at concessional rates up to a cap. Unused annual leave paid out is taxed separately, and long-service leave can have its own rules depending on when it accrued.

Checklist when you are told your job is redundant

  1. Confirm in writing that the role itself is being made redundant.
  2. Count your continuous service, including periods of paid leave.
  3. Check your award or agreement for a better redundancy scale.
  4. Ask for a breakdown: redundancy pay, notice, annual leave, leave loading, long-service leave.
  5. Check your final payslip and the PAYG payment summary or income statement to see how each part was taxed.

FAQ

Is redundancy pay based on my full salary? NES redundancy pay uses your base rate for ordinary hours. It does not include overtime, penalty rates, loadings or bonuses, unless your agreement says otherwise.

Do I get redundancy pay if my employer has 10 staff? Usually not under the NES, because businesses with fewer than 15 employees are exempt. Check your award or contract, which may still provide it.

Is redundancy pay tax-free? Only the part within the genuine redundancy tax-free limit for your years of service. The rest is taxed as an employment termination payment.