Getting made redundant is a bit like being unexpectedly dumped, only this breakup comes with paperwork, tax implications, and a lot of frantic googling. The good news is, unlike a bad relationship, redundancy usually comes with a payout. The tricky part is figuring out exactly how much you’re entitled to, what’s tax-free, and what to do with the lump sum once it lands.

That’s where a good redundancy calculator earns its keep. In this guide, we’ll walk you through what actually happens during redundancy in Australia, how to calculate what you’re owed (without needing a PhD in maths), and where to find the support that’s available.

What Happens During Redundancy?

A redundancy happens when your employer decides your role is no longer needed – not because of anything you did, but because the job itself has been eliminated. Maybe the business restructured, maybe technology took over, maybe the company merged with another and suddenly there are two of everything.

Under Australian law, this needs to be what’s called a genuine redundancy. That means:

• The employer no longer needs your specific job done by anyone.
• They’ve followed any consultation requirements in your award or enterprise agreement.
• They’ve considered whether you could be redeployed elsewhere in the business.

If your role is genuinely gone, you’re typically entitled to a redundancy payment (also called severance pay), notice or pay in lieu of notice, plus any accrued leave. You’ll also usually have access to support services, government assistance, and, importantly, some pretty generous tax concessions.

For the official rundown, the Fair Work Ombudsman’s redundancy page is the source of truth. We’d recommend bookmarking it.

How a Redundancy Calculator Works

Here’s the bit you came for. A redundancy calculator essentially does three things:

1. Works out how many weeks of redundancy pay you’re entitled to based on your years of service.
2. Multiplies that by your weekly base rate of pay.
3. Adds in your notice period, unused leave, and applies the tax-free thresholds set by the ATO.

Let’s break each part down.

Step 1: Your Redundancy Pay (Weeks of Service)

Under the National Employment Standards (NES), redundancy pay is calculated on a sliding scale based on your length of continuous service:

*Yes, that drop at 10 years looks weird. It’s a historical quirk because long-service leave kicks in around then. Your award or enterprise agreement may offer more, so always check the fine print.

Step 2: Your Weekly Base Rate

This is your ordinary hourly rate multiplied by your normal weekly hours. It does not include overtime, bonuses, commissions, allowances, or that one week you billed 70 hours because Barbara was on holiday.

Multiply your weekly base rate by the number of weeks you’re entitled to, and you’ve got your redundancy pay figure.

Step 3: Notice Period (or Pay in Lieu)

You’re also entitled to notice – or payment instead of notice if your employer wants you out the door faster. The minimum notice periods are:

• Under 1 year: 1 week
• 1–3 years: 2 weeks
• 3–5 years: 3 weeks
• More than 5 years: 4 weeks

If you’re over 45 and have been with your employer for at least 2 years, you get an extra week.

Step 4: Annual Leave and Long Service Leave

Any unused annual leave gets paid out, along with any long service leave you’ve accrued. These are taxed differently to redundancy pay, which is where things can get interesting.

Try the Official Redundancy Calculator

The Fair Work Ombudsman has a free Notice and Redundancy Calculator that’s brilliant for working out your statutory minimums. It’ll spit out a clear summary in a few minutes. For the tax side of things, you can also use HPartners’ suite of financial calculators to model how your payout fits into the bigger picture.

The Tax Bit

Here’s where a redundancy calculator really comes into its own: the tax-free threshold on a genuine redundancy is generous.

For the 2025–26 financial year, the ATO’s tax-free limit is:

$13,100 base amount + $6,552 for each completed year of service

So if you’ve worked somewhere for 10 full years, $13,100 + ($6,552 × 10) = $78,620 of your redundancy is completely tax-free. Anything above that threshold gets taxed as an Employment Termination Payment (ETP) at concessional rates (up to 30% if you’re under preservation age, 15% if you’re older).

A heads up: from 1 July 2026, the threshold rises to $13,598 base plus $6,801 per year of service. If you’re being made redundant around that date, the timing of the payment matters – and that’s a conversation worth having with an adviser.

What Help Is Available?

You’re not on your own. There’s a whole ecosystem of support:

• Services Australia (Centrelink) offers JobSeeker Payment and other income support. There can be a waiting period if your redundancy payout pushes you over the asset or income test thresholds — another reason to plan ahead.
• Workforce Australia runs employment services and free upskilling programs.
• Beyond Blue and Lifeline (13 11 14) are there if the emotional side is hitting hard. Losing a job is stressful — there’s no shame in calling.
• Fair Work Ombudsman (13 13 94) can help if you suspect your employer hasn’t paid you what you’re owed.

And then there’s the financial side, which is where things either go really well or really sideways depending on the choices you make in the first few weeks.

Smart Moves With Your Redundancy Payout

A redundancy payout is often the biggest lump sum a person sees outside of an inheritance or a property sale. Treat it carefully:

• Don’t blow it in month one. New car energy is real. So is regret.
• Pay down high-interest debt first. Credit cards and personal loans eat returns alive — our debt management page digs into this.
• Top up your super (carefully). Contributing extra to super can be tax-effective, but watch the caps. This is genuinely a “ask before you act” situation.
• Build a cash buffer. If you’re between jobs, 3–6 months of living expenses in an offset or high-interest savings account is gold. Our cashflow and budgeting service helps you map this out.
• Think about insurance. Your employer-provided cover (life, TPD, income protection) often ends with the job. Plugging that gap matters — see our insurance and risk protection page.
• Get tax advice. ETP rules, leave payouts, and HECS thresholds all interact in ways that can quietly cost you thousands.

How HPartners Can Help

A redundancy calculator gives you the numbers. We help you decide what to do with them.

At HPartners, we’ve walked plenty of clients through redundancy, from senior execs negotiating exit packages to FIFO workers facing project shutdowns. Our Redundancy & Inheritance service is specifically designed for moments like this, where a lump sum lands and you need to think clearly about tax, super, debt, investments, and what comes next.

Because we’re a one-stop shop – financial planning, accounting, and legal all under one roof, you’re not bouncing between three professionals trying to make them talk to each other. We do that for you. If you want help reviewing an exit package, modelling your tax position, or building a plan for the next chapter, book a chat with the team.

Redundancy isn’t the end of the story. With the right numbers and the right plan, it can actually be the start of something better. Maybe even something a little bit exciting.

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.