Question 1

How is redundancy pay calculated in Australia?

Accepted Answer

Under the Fair Work Act, redundancy pay is based on years of continuous service. The number of weeks' pay ranges from 4 weeks (1-2 years) up to 16 weeks (9-10 years). For 10+ years, it drops to 12 weeks as long service leave entitlements begin.

Question 2

Who qualifies for redundancy pay in Australia?

Accepted Answer

You generally qualify if you've worked for your employer for at least 1 year on a full-time or part-time basis, and your employer has 15 or more employees. Casual employees and those at small businesses (under 15 staff) may not be covered.

Question 3

Why does redundancy pay decrease after 10 years?

Accepted Answer

After 10 years of continuous service, the statutory redundancy entitlement drops from 16 to 12 weeks because employees become eligible for long service leave, which provides additional leave benefits.

Question 4

Is redundancy pay taxable in Australia?

Accepted Answer

Genuine redundancy payments are tax-free up to a limit that depends on your years of service. The tax-free limit is a base amount plus an amount for each completed year of service. Amounts above this limit are taxed at concessional rates.

Question 5

Can my employer pay more than the Fair Work minimum?

Accepted Answer

Yes. Many awards, enterprise agreements and employment contracts provide for redundancy pay above the Fair Work minimum. Always check your applicable instrument for enhanced entitlements.

Australia Redundancy Pay Calculator 2026

Frequently asked questions

Australia Redundancy Pay Calculator 2026

Frequently asked questions