Redundancy Calculator FAQs

Do you have an Excel version of this redundancy calculator?

Yes! You can download the redundancy calculator in Excel for your personal use from this link. You need to enable macros in order to use the Excel redundancy calculator.

Is this redundancy calculator secure?

Yes! Your information is protected with our SSL certificate.

Can I put a link to your redundancy calculator on my website?

Yes and you are welcome to link back to our redundancy entitlement calculator by using the code below. You can click on the "Copy to Clipboard" button to copy the redundancy calculator linking code.

<p><a href="https://www.redundancypaymentcalculator.com.au" target="_blank">Redundancy Calculator</a></p>

Is there a superannuation payment for accrued long service leave and annual leave?

If long service leave or annual leave is paid out upon termination of employment, superannuation contributions are not required to be made. Super guarantee is calculated based on ordinary time earnings (OTE). According to ATO unused annual leave, long service leave or sick leave included in the termination payments are not OTE so no super guarantee is paid. Please refer to List of payments that are ordinary time earnings on ATO website.

Is superannuation paid on annual leave loading?

Annual leave loading is an extra payment that may be paid to an employee on top of their base rate during periods of annual leave. Annual leave loading is included in ordinary time earnings (OTE) unless it is clearly linked to lost overtime. Since super guarantee is calculated based on ordinary time earnings (OTE) and annual leave loading is included in OTE, super guarantee should be paid on annual leave loading. Please refer to Superannuation on annual leave loading on ATO website. Please note OTE does not include overtime which means no superannuation is paid on overtime.

Is superannuation paid on Payments in Lieu of Notice (PILON)?

Instead of giving you the required period of notice, your employer can pay you an amount equal to your wages for the period of notice you are entitled to, and ask you to leave straight away. This is called a payment in lieu of notice. Payments in Lieu of Notice are ordinary time earnings (OTE) so superannuation is payable on Payments in Lieu of Notice. Please refer to List of payments that are ordinary time earnings on ATO website. You can find that Termination payments – in lieu of notice is OTE in the Termination Payments table at the end. In addition there is a discussion about Superannuation on Payments in Lieu of Notice on the website of ATO Community. You can find a response marked as ATO Certified Response. In that response it clearly stated that "that PILON is OTE and there should be a superannuation guarantee contribution from the employer to the employee's super fund account." The author in addition noted that "PILON is also paid upon termination if the reason is dismissal, so it's not specific to a genuine redundancy." If your employer tells you that the PILON component of a redundancy payment is tax-free so it is not considered to be OTE and it does not attract any superannuation payment, you can tell your employer that they are wrong as superannuation should be paid on Payments in Lieu of Notice (PILON).

Is the notice of redundancy for an employee aged younger than 65 tax free?

If you mean the Employment Termination Payments (ETP) tax rate for people above the Preservation age (60 or older), it should be 17%. For people under preservation age (60), it should be 32.00%. However if the payment is a genuine redundancy payment and lower than the ETP tax-free limit, it will be tax free. Please read more about ETP caps on ATO website.

I am 67 and have just been made redundant. I was told that because I'm over the pension age it's classed as a non-genuine redundancy so I do not get a tax-free amount. Have I been mis-informed ?

According to Taxation Ruling: TR 2009/2 on ATO website, an employee must be less than the pension age at the time of dismissal for a redundancy payment to qualify as a genuine redundancy payment. However, if the employment of a particular employee would have otherwise terminated at a younger age than the pension age, the employee must be dismissed before that time.

Based on the above-mentioned you are not mis-informed. Since you was made redundant at an age older than the pension age, your redundancy payment cannot be qualified as a genuine redundancy payment so you cannot have the Employment Termination Payments (ETP) tax-free limit.

The table below shows the pension age.

Period within which a person was born	Pension age	Date pension age changes
From 1 July 1952 to 31 December 1953	65 years and 6 months	1 July 2017
From 1 January 1954 to 30 June 1955	66 years	1 July 2019
From 1 July 1955 to 31 December 1956	66 years and 6 months	1 July 2021
From 1 January 1957 onwards	67 years	1 July 2023

What is a genuine redundancy payment?

A genuine redundancy payment is one "received by an employee who is dismissed from employment because the employee's position is genuinely redundant". There are four necessary components within this requirement:

Component 1 The payment being tested must be received in consequence of an employee's termination.
Component 2 That termination must involve the employee being dismissed from employment.
Component 3 That dismissal must be caused by the redundancy of the employee's position.
Component 4 The redundancy payment must be made genuinely because of a redundancy.

The satisfaction of this requirement establishes the essential character of the payment. However, there are further conditions (list below) that must also be satisfied before a payment can be treated as a genuine redundancy payment.

Condition 1 The dismissed employee is not older than specified age limits;
Condition 2 The termination is not at the end of a fixed period of employment;
Condition 3 The actual amount paid is not greater than the amount that could reasonably be expected had the parties been dealing at arm's length, in the event that the employer and employee are in fact not dealing at arm's length in relation to the dismissal;
Condition 4 There is no arrangement entered into between the employer and the employee or the employer and another entity to employ the dismissed employee after the termination; and
Condition 5 The payment is not in lieu of superannuation benefits.

Please refer to Taxation Ruling: TR 2009/2 on ATO website.

What amount of notice of termination must be given?

Based on the National Employment Standards (NES), the minimum notice period is listed in the table below. This applies to all employees (other than casuals), not just those covered by the national workplace relations system.

Period of continuous service	Minimum notice period
1 year or less	1 week
More than 1 year - 3 years	2 weeks
More than 3 years - 5 years	3 weeks
More than 5 years	4 weeks

Employees over 45 years old who have completed at least two years of service when they receive notice are given an additional week of notice.

What redundancy pay is payable?

Employees receive redundancy pay based on their continuous period of service with their employer. This amount is paid at the employee's base pay rate for ordinary hours worked. Based on the National Employment Standards (NES), the minimum redundancy pay is listed in the table below. This redundancy payment table only applies to employees covered by the national workplace relations system in Australia.

Period of continuous service	Redundancy pay
At least 1 year but less than 2 years	4 weeks
At least 2 years but less than 3 years	6 weeks
At least 3 years but less than 4 years	7 weeks
At least 4 years but less than 5 years	8 weeks
At least 5 years but less than 6 years	10 weeks
At least 6 years but less than 7 years	11 weeks
At least 7 years but less than 8 years	13 weeks
At least 8 years but less than 9 years	14 weeks
At least 9 years but less than 10 years	16 weeks
At least 10 years	10 weeks *

* Employees whose position is made redundant after 10 years or more of service will receive only 12 weeks' pay, to avoid 'double counting' for employees who receive pro rata long service leave entitlements. This is consistent with the 2004 Redundancy Case decision made by the Australian Industrial Relations Commission.

How does the tax-free part of genuine redundancy payment is calculated?

The tax-free part of genuine redundancy payment is calculated based on the limits set for genuine redundancy and early retirement scheme payments. It includes the base limit and the service amount which are listed in the table below.

Income year	Base limit	Service amount limit (For each complete year of service)
2024-25	$12,524	$6,264
2023-24	$11,985	$5,994
2022-23	$11,591	$5,797
2021-22	$11,341	$5,672
2020-21	$10,989	$5,496

For example, if you are made redundant in the year of 2024-25 after 10 years with your current employer the tax free amount of your redundancy payment will be: $12,524 + $6,264 X 10 = $75,164.

The base limit and service amount is indexed in line with average weekly ordinary time earnings (AWOTE) each income year. The new indexed amount is generally available each February.