Redundancy pay

When an employee’s job is made redundant, their employer may need to pay them redundancy pay.

Find out about who is entitled to redundancy pay and when it doesn’t apply.

On this page:

Understanding redundancy pay

If an employee’s job has been made redundant, they may be entitled to redundancy pay if:

  • they’ve at least one year of continuous service with their employer
  • they’re covered under the national workplace relations system, and
  • their employer employs at least 15 people.

Redundancy pay entitlements come from:

Continuous service

The amount of redundancy pay an employee gets depends on their length of continuous service.

Continuous service is how long an employee has worked for an employer.

The longer an employee has worked for an employer, the more redundancy pay they will be entitled to.

Unpaid leave

When calculating redundancy pay, unpaid leave doesn’t count towards continuous service.

Continuous service isn’t broken by taking unpaid leave.

For more information, visit Unpaid leave and continuous service.

Redundancy under the National Employment Standards

Most employees get their redundancy entitlement from the NES.

An employer (other than a small business employer) must pay the following minimum redundancy pay:

Period of continuous serviceRedundancy pay
At least 1 year but less than 2 years4 weeks
At least 2 years but less than 3 years6 weeks
At least 3 years but less than 4 years7 weeks
At least 4 years but less than 5 years8 weeks
At least 5 years but less than 6 years10 weeks
At least 6 years but less than 7 years11 weeks
At least 7 years but less than 8 years13 weeks
At least 8 years but less than 9 years14 weeks
At least 9 years but less than 10 years16 weeks
At least 10 years12 weeks

Most small business employers don’t have to pay redundancy pay under the NES. Find out more at Who doesn’t get redundancy pay.

Payment for redundancy

Redundancy pay is paid at the employee's base pay rate for their ordinary hours of work, and doesn't include:

  • incentive-based payments and bonuses
  • loadings
  • monetary allowances
  • overtime or penalty rates
  • any other separately identifiable amounts.

Any outstanding entitlements also need to be paid out, including any unused annual leave and long service leave.

Notice periods

An employer must still give an employee notice of termination when making an employee's job redundant. This can include giving a notice period or payment in lieu of notice.

Usually, employees with less than 12 months service don’t get redundancy pay but may still be entitled to notice.

Learn more at Dismissal.

Example: Employee checks their redundancy pay

Melissa has worked as a full-time employee at a large restaurant for 3 years. Recently, she has been told that her role has been made redundant. Melissa’s employer tells her that her final pay will include redundancy pay.

Melissa uses our Notice and Redundancy Calculator to check how much redundancy pay she’s entitled to. She finds out that based on her length of service, she is entitled to:

  • 7 weeks of redundancy pay
  • 3 weeks of notice.

Melissa will also be paid out any outstanding entitlements, including wages and annual leave, in her final pay.

Redundancy under awards and agreements

If an employee is covered by an award or agreement, their redundancy entitlement might be different to what is in the NES.

Award redundancy entitlements

Find information about redundancy entitlements in your award by selecting from the list below.

Industry Embedded Filter Placeholder

Industry-specific redundancy entitlements in awards

Some awards have industry specific redundancy entitlements which apply instead of the NES. This can include different rules about:

  • when a redundancy happens
  • who the redundancy clause applies to
  • what an employee needs to be paid.

Awards with industry specific redundancy entitlements include:

Example: Redundancy in the Timber industry

Alex works for a small business in the forestry management sector. He has been in the job for just over a year when his role is made redundant.

Alex’s boss employs less than 15 employees. Under the NES, he would not be entitled to redundancy pay.

Alex is covered by the Timber Award. He looks at our website and finds the Library article on Small business redundancy pay in the Timber Award.

Under the Timber Award, small businesses must pay redundancy pay.

Alex gets 4 weeks of redundancy pay.

Tip: Use our Notice and Redundancy Calculator

Use our Notice and Redundancy Calculator to calculate redundancy pay under your award or the NES.

Enterprise agreement redundancy entitlements

If an employee is covered by an enterprise agreement, the agreement may include entitlements and rules about redundancy.

To find an enterprise agreement, search the Fair Work Commission’s website at Find an enterprise agreement.

Relocation and redundancy

A business may ask their employees to move to a new location.

Employees may be entitled to redundancy pay if it’s reasonable to refuse the relocation.

For more information, go to our Library article – Workplace relocation and redundancy.

Reducing redundancy pay

An employer can apply to the Fair Work Commission (the Commission) to have the amount of redundancy pay reduced if the employer:

  • finds other acceptable employment for the employee, or
  • can't afford the full redundancy amount.

Employers can only apply to the Commission if the redundancy entitlement comes from the NES.

An employer can’t apply to the Commission if the redundancy entitlements come from an award or an enterprise agreement.

Learn more on the Commission's website at Apply to change redundancy pay.

When redundancy pay doesn’t apply

Redundancy pay doesn't need to be paid in some circumstances.

To find out when redundancy pay doesn’t apply, visit Who doesn't get redundancy pay.

Source reference for page: Fair Work Act 2009 sections 16, 22, 117, 119–121, 141

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