Redundancy Pay WA: Calculator, Entitlements and Tax
Redundancy pay in Australia is 4 to 16 weeks of base pay, set by your years of continuous service, if your employer has 15 or more employees and your job is no longer needed by anyone. You also get notice (or pay in lieu) of 1 to 5 weeks, plus your unused annual leave and any long service leave. A genuine redundancy payment is tax-free up to $13,598 plus $6,801 for each complete year of service in 2026–27.
Last fact-checked: 3 November 2026, against the Fair Work Ombudsman, the ATO's 2026–27 limits and the WA Government's redundancy guidance. Pay rates, rules and job numbers change; follow the linked source before you act.
How much redundancy pay do you get?
Under the National Employment Standards (NES), you get a set number of weeks' pay based on your continuous service with the employer. It starts at 4 weeks after 1 year and peaks at 16 weeks after 9 years. Your award or enterprise agreement can give you more, never less.
The calculator below works out redundancy pay, notice and the tax-free limit. The table is the full NES scale, with dollars at $1,500 a week base pay.
| Continuous service | Redundancy pay (weeks) | Notice (weeks) | Notice if over 45 (weeks) | Redundancy pay at $1,500/week base |
|---|---|---|---|---|
| Less than 1 year | 0 | 1 | 1 | Nil |
| 1 year to less than 2 | 4 | 2 | 2 | $6,000 |
| 2 years to less than 3 | 6 | 2 | 3 | $9,000 |
| 3 years to less than 4 | 7 | 3 | 4 | $10,500 |
| 4 years to less than 5 | 8 | 3 | 4 | $12,000 |
| 5 years to less than 6 | 10 | 4 | 5 | $15,000 |
| 6 years to less than 7 | 11 | 4 | 5 | $16,500 |
| 7 years to less than 8 | 13 | 4 | 5 | $19,500 |
| 8 years to less than 9 | 14 | 4 | 5 | $21,000 |
| 9 years to less than 10 | 16 | 4 | 5 | $24,000 |
| 10 years or more | 12 | 4 | 5 | $18,000 |
Notice is based on service on the day notice is given: 1 week for 1 year or less, 2 weeks for more than 1 and up to 3 years, 3 weeks for more than 3 and up to 5 years, and 4 weeks after that. So someone at exactly 1, 3 or 5 years sits in the lower band. The over-45 extra week only applies with at least 2 years' continuous service.
Unpaid leave doesn't count towards service for redundancy pay, but doesn't break it either. Some awards (including the Building and Construction, Manufacturing, Plumbing, Joinery, Timber and Black Coal awards) have industry-specific redundancy schemes that replace the NES scale. Fair Work's free Notice and Redundancy Calculator checks those.
How do you calculate redundancy pay?
Multiply the weeks from the table by your weekly base rate of pay for your ordinary hours. Then add notice, unused annual leave and long service leave on top.
Base rate means your ordinary-hours rate only. Fair Work says redundancy pay doesn't include:
- incentive payments and bonuses
- loadings
- monetary allowances
- overtime or penalty rates
- any other separately identifiable amounts
Notice works differently. If your employer pays you instead of letting you work the notice period, they must pay the full amount you would have earned by working it. That includes loadings, allowances, overtime and penalty rates. So a shift worker's weekly notice pay can be higher than their weekly redundancy pay.
Worked example: Perth warehouse supervisor
Sandra is 48. She has worked full-time for a Perth logistics company (a Pty Ltd with 40 staff) for 7 years and 4 months. Her base rate is $1,600 a week for 38 ordinary hours. With her regular shift allowance she averages $1,750 a week. Her job is abolished after a restructure and her employer pays out her notice.
| Item | Working | Amount |
|---|---|---|
| Redundancy pay | 13 weeks × $1,600 base | $20,800 |
| Pay in lieu of notice | 4 weeks + 1 (over 45, 2+ years) = 5 weeks × $1,750 full rate | $8,750 |
| Genuine redundancy payment | Redundancy pay + notice | $29,550 |
| 2026–27 tax-free limit | $13,598 + (7 complete years × $6,801) | $61,205 |
| Tax on the $29,550 | Under the limit | Nil |
Sandra's unused annual leave and leave loading are paid on top and taxed separately. Because she has passed 7 years, she also gets pro-rata long service leave under the WA Act. Our WA long service leave guide shows how to work that out, and our annual leave guide covers loading.
Is redundancy pay taxed?
A genuine redundancy payment is tax-free up to a limit set each income year by the ATO. Anything above the limit is taxed as an employment termination payment (ETP) at concessional rates, up to a cap.
| Income year | Base limit | Per complete year of service | Limit at 5 years | Limit at 10 years |
|---|---|---|---|---|
| 2026–27 (1 July 2026 to 30 June 2027) | $13,598 | $6,801 | $47,603 | $81,608 |
| 2025–26 | $13,100 | $6,552 | $45,860 | $78,620 |
Only complete years count. 7 years and 11 months is 7 years. The limit uses the figures for the income year you receive the payment, so a redundancy paid between now and 30 June 2027 uses the 2026–27 row.
For the tax-free treatment to apply, the ATO says the payment must be for a genuine redundancy and you must be under age-pension age (67 if you were born on or after 1 January 1957) on the day you're dismissed. It's not a genuine redundancy for tax if you leave voluntarily, your contract ends, you reach normal retirement age, or you're dismissed for disciplinary or performance reasons.
What counts towards the tax-free amount: payment in lieu of notice, severance (weeks of pay per year of service) and a golden handshake. What doesn't: wages owing, unused annual leave and leave loading, unused long service leave, and payments instead of super. Those are taxed under their own rules.
The amount over the limit is taxed at 17% if you've reached preservation age, or 32% if you haven't, up to the ETP cap of $270,000 for 2026–27. Above the cap it's 47% (45% plus Medicare levy).
Who isn't entitled to redundancy pay?
You don't get NES redundancy pay if you:
- have less than 12 months' continuous service
- are a casual employee
- were employed for a specific period, project or season
- were dismissed for serious misconduct
- are a trainee employed only for the length of the training arrangement, or an apprentice
- work for a small business employer (below)
Casuals miss out even after years of regular shifts. See our casual vs part-time guide for what you trade for the 25% loading.
What is the small business exemption?
An employer with fewer than 15 employees at the time of the redundancy doesn't have to pay NES redundancy pay. It's a headcount, not a full-time-equivalent count.
Count everyone employed at that time, including:
- the employee or employees being made redundant
- all full-time and part-time employees
- casuals employed on a regular and systematic basis
- employees of associated entities, including those based overseas
Two exceptions: an award with an industry-specific redundancy scheme can require a small business to pay, and since 15 December 2023 an employer that shrank below 15 through redundancies while bankrupt or in liquidation may still have to pay the remaining staff.
What makes a redundancy genuine?
A redundancy is genuine when the job no longer needs to be done by anyone because of changes in the business, and the employer followed the consultation rules in the award or enterprise agreement. A genuine redundancy can't be challenged as an unfair dismissal.
It's not genuine if the employer:
- still needs the job done by someone (for example, they hire a replacement)
- didn't follow the award or agreement consultation requirements, or
- could reasonably have redeployed you within the business or an associated entity
If it isn't genuine, it may be an unfair dismissal. National system employees must apply to the Fair Work Commission within 21 days. Employers planning to cut 15 or more jobs must notify Services Australia in writing before the dismissals happen.
Redundancy vs dismissal: what's the difference?
Redundancy is about the job. Dismissal for performance or conduct is about the person, and pays less.
| Redundancy | Dismissal (performance or conduct) | Resignation | |
|---|---|---|---|
| Redundancy pay | Yes, if eligible | No | No |
| Notice or pay in lieu | Yes | Yes (none for serious misconduct) | You give notice |
| Tax-free redundancy limit | Yes, if genuine | No | No |
Resigning before a restructure gives up redundancy pay and the tax-free limit. If you still want to go, use our resignation letter template.
What else must be paid out when you're made redundant?
Your final pay must include any outstanding wages, unused annual leave and long service leave owed to you. In WA, long service leave is pro rata from 7 years of continuous service, and redundancy counts as a qualifying reason.
Fair Work's list of outstanding entitlements names annual leave and long service leave. Personal leave works differently: see our sick and carer's leave guide.
An employer can ask the Fair Work Commission to reduce NES redundancy pay if it finds you other acceptable work or can't afford the payment. That only applies to NES redundancy pay, not award or agreement schemes.
Does the WA state system require redundancy pay?
Yes, if the employer has 15 or more employees. Sole traders, and partnerships and trusts with no company partner or trustee, are in the WA state system. If they have 15 or more staff they must pay the same 4-to-16-week severance scale.
The WA rules differ from the NES in four ways:
- The headcount includes casual and part-time employees. Under the NES only regular and systematic casuals count.
- Some WA awards require severance whatever the size of the business, so a small employer can still owe it.
- Excluded employees are those with under 1 year's service, probationary employees, apprentices and trainees, casual and contract employees, and anyone dismissed for serious misconduct.
- Paid time off for job interviews: up to one day a week during the notice period under the WAIRC's Termination, Change and Redundancy General Order, or 8 hours under the Minimum Conditions of Employment Act, whichever is greater.
Severance is paid on ordinary time earnings, which excludes overtime, penalties, shift and disability allowances, fares and bonuses. If a state system employee resigns during the notice period, they still get the same severance. Notice periods match the national table above. Not sure which system you're in? Our WA state vs national system guide explains it, or call Wageline on 1300 655 266.
Made redundant and looking for your next role? Browse current jobs in Perth.
Frequently asked questions
How much redundancy pay do I get after 5 years?
10 weeks of base pay under the NES if you have at least 5 but less than 6 years of service and your employer has 15 or more employees. You also get 4 weeks' notice (5 if you're over 45).
How do I calculate my redundancy pay?
Find your weeks in the NES table based on completed continuous service, then multiply by your weekly base rate for ordinary hours. Loadings, allowances, overtime and bonuses are left out.
How much redundancy pay is tax-free in 2026–27?
$13,598 plus $6,801 for each complete year of service, if the redundancy is genuine and you're under age-pension age. With 10 years' service that's $81,608.
Do small businesses have to pay redundancy?
Not under the NES if they have fewer than 15 employees, counting regular casuals and associated entities. An award redundancy scheme, or a WA award in the state system, can still require it.
Is redundancy pay less after 10 years?
Yes, under the NES. The scale sets 16 weeks for 9 to 10 years of service and 12 weeks for 10 years or more. Many awards and agreements pay more, so check yours.
Do casuals get redundancy pay?
No. Casual employees aren't entitled to NES redundancy pay or notice, even after years of regular shifts. Their award or agreement may say otherwise.
Sources
- Fair Work Ombudsman, Redundancy pay
- Fair Work Ombudsman, Who doesn't get redundancy pay
- Fair Work Ombudsman, Redundancy (genuine redundancy and consultation)
- Fair Work Ombudsman, Dismissal (notice periods and pay in lieu)
- Fair Work Ombudsman, Notice and Redundancy Calculator
- ATO, Employment termination payments: caps and genuine redundancy limits
- ATO, Genuine redundancy payments
- ATO, How ETP components are taxed
- ATO, Redundancy and early retirement (age-pension age table)
- WA Government, Redundancy (state system severance)
- WA Government, Minimum notice periods when employment ends
- WA Government, Paid leave for job interviews when employment ends
- WA Government, Which system of employment law applies