How to Calculate Redundancy Pay in Australia (2026)

When redundancy pay is owed

Under the Fair Work Act 2009 (Cth), a redundancy occurs when an employer no longer requires a person's job to be performed by anyone, or becomes insolvent or bankrupt. It is the position that is redundant, not the person.

If a role is genuinely redundant, and the National Employment Standards (NES) apply, the employer must pay redundancy pay on top of notice, accrued leave and any award or contract entitlements.

The NES redundancy scale

Redundancy pay under the NES is based on continuous service:

• At least 1 year but less than 2 — 4 weeks' pay
• 2 years but less than 3 — 6 weeks
• 3 years but less than 4 — 7 weeks
• 4 years but less than 5 — 8 weeks
• 5 years but less than 6 — 10 weeks
• 6 years but less than 7 — 11 weeks
• 7 years but less than 8 — 13 weeks
• 8 years but less than 9 — 14 weeks
• 9 years but less than 10 — 16 weeks
• 10 years or more — 12 weeks (reduced to recognise long-service leave)

Exceptions to the NES scale

• Small business employers (fewer than 15 employees) are generally exempt from NES redundancy pay.
• Casuals, fixed-term employees whose contract has ended, and employees terminated for serious misconduct are not entitled.
• Some modern awards and enterprise agreements provide higher amounts — always check the applicable instrument.

Consultation and 'suitable alternative employment'

Redundancy also carries procedural obligations — consultation under the applicable award, exploration of redeployment, and potential Fair Work Commission review of the reduction. Getting the calculation right without getting the process right still exposes the business to unfair dismissal risk.

Envision Legal advises employers through the full end-to-end redundancy process, from planning to letters and settlement deeds.

This article contains general information only and does not constitute legal advice. Envision Legal accepts no liability for any loss arising from reliance on this content. You should seek independent legal advice tailored to your specific circumstances. For enquiries, contact Envision Legal.