Redundancy Pay Calculator

Redundancy pay entitlements in Australia

When an employer no longer requires an employee's job to be done by anyone, the employee may be entitled to redundancy pay under the National Employment Standards (NES). The amount depends on the employee's period of continuous service and their base rate of pay for ordinary hours worked - overtime, incentive payments, and bonuses are excluded from this calculation.

The NES redundancy scale ranges from 4 weeks' pay (for 1-2 years of service) up to 16 weeks' pay (for 9-10 years), then reduces to 12 weeks for employees with 10 or more years of service. Small businesses with fewer than 15 employees are exempt from paying redundancy under the NES, though applicable awards or enterprise agreements may still require it.

How to use this redundancy pay calculator

1. Enter the employee's start date and termination date to calculate their continuous period of service.
2. Enter the employee's base weekly pay rate (ordinary hours only - exclude overtime, bonuses, and allowances).
3. Select whether the employee is aged 45 or over with at least 2 years of service, which adds an extra week to the notice period.
4. Review the breakdown showing redundancy pay weeks, notice period entitlement, and total termination payout including any accrued leave balances.

What is included in a redundancy payout in Australia?

A redundancy payout includes redundancy pay under the NES scale plus a minimum notice period (or payment in lieu) of 1 to 4 weeks depending on tenure, with an extra week for employees aged 45 or over with at least 2 years of service. Accrued annual leave is paid out at the current rate, and long service leave applies once the state pro-rata threshold is reached. A tax-free component applies based on years of service.

How do portable redundancy schemes work in Australia?

Several industries run portable redundancy schemes alongside the NES. In building and construction, funds like ACIRT and BERT (QLD) collect a set employer contribution per employee per week, and coal mining has its own provisions under the Black Coal Mining Industry Award. Because these funds pay redundancy benefits even when employees move between employers in the industry, the NES entitlement may be reduced by the amount available from the portable fund.

How can businesses budget for redundancy costs?

Redundancy payments represent a significant, often unplanned cash outflow. Businesses that automate their accounts payable have better visibility over cash flow forecasting, making it easier to budget for termination entitlements when restructuring is necessary. With real-time financial data, management can model the cost of redundancies before making final decisions. Smarter payment scheduling to protect cash flow frees up the working capital these payouts require.