How much redundancy pay?

The amount of redundancy pay under the NES equals the total amount payable to the employee for the redundancy pay period. This is worked out using the table below, at the employee's 'base rate of pay' for his or her ordinary hours of work.

An employee's base rate of pay (other than a pieceworker) is the rate of pay payable to an employee for his or her ordinary hours of work, but not including any of the following:

  • incentive-based payments and bonuses
  • loadings
  • monetary allowances
  • overtime or penalty rates
  • any other separately identifiable amounts.
Employee's period of continuous service
with the employer on termination
  Redundancy pay period
At least but less than
1 year 2 years  4 weeks 
2 years 3 years 6 weeks
3 years 4 years 7 weeks
4 years 5 years 8 weeks
5 years 6 years 10 weeks
6 years 7 years 11 weeks
7 years 8 years 13 weeks
8 years 9 years 14 weeks
9 years 10 years 16 weeks
10 years

 -

12 weeks

Note: long service leave entitlements provide the rationale for reducing the redundancy pay entitlement for employees who have a period of 10 years’ continuous service or greater.

It is possible for an employer to apply to the Fair Work Commission (the Commission) for a determination reducing their liability to pay redundancy pay to a specified amount (that may be nil), if the Commission considers appropriate. The employer may apply for the determination if an employee is entitled to redundancy pay and the employer finds other acceptable employment or cannot pay the amount.

The base rate of pay for a pieceworker may be specified in the applicable modern award or enterprise agreement.  Otherwise it is determined by the following formula:

  • Total amount earned by the pieceworker in the previous 12 months*
  • Total hours worked by the pieceworker in the previous 12 months*

 * or period continuously employed if less than 12 months. 

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Page last updated: 20 Aug 2010