Redundancy Calculator Australia 2025-26
Calculate your tax-free redundancy amount and net payout for a genuine redundancy in 2025-26. Based on ATO Employment Termination Payment (ETP) rules — tax-free base of $13,100 plus $6,260 per year of service.
Net Redundancy Payment (after ETP tax)
$55,008
Tax-free formula: $13,100 base + $6,260 × 5 years = $44,400
ETP cap: $260,000 — concessional 32% rate applies to the taxable ETP up to this cap (age < 60); amounts above are taxed at 47%.
Estimated salary tax: $17,720/yr · Fortnightly: $682
This is an estimate. Seek advice for complex situations (age ≥60, multiple ETPs, unused leave).
Genuine Redundancy Tax-Free Amounts by Years of Service (2025-26)
| Years of Service | Tax-Free Amount |
|---|---|
| 1 year | $19,360 |
| 2 years | $25,620 |
| 3 years | $31,880 |
| 5 years | $44,400 |
| 7 years | $56,920 |
| 10 years | $75,700 |
| 15 years | $107,000 |
| 20 years | $138,300 |
Frequently Asked Questions
How much of a redundancy payment is tax-free?
For a genuine redundancy in 2025-26, the tax-free amount is $13,100 plus $6,260 for each completed year of service with the same employer. Anything above this is treated as an Employment Termination Payment (ETP).
What is an ETP (Employment Termination Payment)?
An ETP is the taxable portion of a lump-sum payment made when your employment ends — including the taxable part of a redundancy, payment in lieu of notice, and unused long service leave (in some cases). ETPs are generally taxed at 32% (concessional rate) up to the $260,000 cap.
Is redundancy tax-free if I am over 65?
No. The genuine redundancy tax-free threshold only applies if you are under pension age (currently 67). If you are at or above pension age, the entire payment is taxed as an ETP.
Does redundancy affect my annual tax return?
Yes. The taxable ETP is included on your annual payment summary and must be declared in your tax return. However, it is generally taxed at concessional rates (32%) rather than your top marginal rate, which could be up to 47%.
What about accrued annual leave?
Accrued annual leave paid out on termination is taxed as normal income (PAYG withholding applies). It is not part of the redundancy tax-free amount. Long service leave has its own tax treatment depending on when it was accrued.