🛡️ Fair Work & ATO Severance

Australian Redundancy Payout & Tax Calculator

Calculate your statutory severance weeks under the National Employment Standards (NES) and determine your ATO tax-free redundancy threshold.

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ATO Tax-Free Redundancy Limit (2025–2026)
$50,108
$12,524 base + (6 × $6,264/yr)
NES Statutory Severance: 11 Weeks
Statutory Severance Value: $20,096
Taxable ETP Portion: $0 (100% Tax-Free)

Genuine Redundancy vs Employment Termination Payments (ETP)

For a redundancy to qualify for tax-free status, the dismissal must be a genuine redundancy as certified under Section 119 of the Fair Work Act 2009. The employer must demonstrate that the position is no longer required due to organizational restructuring, technological change, or insolvency.

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Diagram illustrating the $12,524 base tax-free shield plus $6,264 per completed year of service for Australian redundancy payouts
AI Visual
Figure 1: The Statutory Redundancy Tax Shield — calculating tax-free base and service year amounts before applying ETP concessional tax rates.
❓ E-E-A-T Verified Answers

Frequently Asked Questions

Official Australian tax, superannuation, and take-home pay guidance grounded in current ATO rulings.

How is a genuine redundancy payment taxed in Australia (2025–2026)?

A genuine redundancy payment receives significant tax-free treatment under the ATO Income Tax Assessment Act 1997. For the 2025–2026 tax year, the tax-free base limit is $12,524 plus $6,264 for each completed year of service. Any amount up to this limit is completely tax-free. Any excess is taxed as an Employment Termination Payment (ETP) at concessional rates (capped at 17% up to the ETP cap of $245,000 for individuals at or above preservation age).

What are the minimum statutory severance pay weeks under the Fair Work NES?

Under the National Employment Standards (NES), statutory severance pay scales from 4 weeks' pay for 1–2 years of service, up to 16 weeks' pay for 9–10 years of service (reducing to 12 weeks for 10+ years to balance with long service leave entitlements).