Redundancy pay and entitlements
When an employee’s job is made redundant, their employer may need to pay them redundancy pay (also known as severance pay).
On this page:
Use our Notice and Redundancy Calculator to calculate redundancy pay.
Under the National Employment Standards (NES), redundancy pay doesn't need to be paid in some circumstances, such as if the employer is a small business or the employee is a casual. To find out when redundancy doesn't need to be paid, visit Who doesn't get redundancy pay.
The amount of redundancy pay the employee gets is based on their continuous service with their employer. Continuous service is the length of time they're employed by the business and doesn't include periods of unpaid leave. Read our Library article about whether casual service counts for redundancy pay.
Some awards have industry-specific redundancy clauses, which apply instead of the NES. Industry-specific redundancy clauses can have different rules about:
- when a redundancy happens
- who the redundancy clause applies to
- what an employee needs to be paid.
If you're covered by a registered agreement, check the terms of your agreement for information about how much redundancy needs to be paid out and other entitlements. To find an enterprise agreement, go to the Fair Work Commission website.
Find information about redundancy entitlements in your award by selecting from the list below.
An employer can apply to the Fair Work Commission (FWC) to have the amount of redundancy pay reduced if:
- the employer finds other acceptable employment for the employee, or
- the employer can't afford the full redundancy amount.
However, employers can only apply to the FWC if the redundancy pay comes from the NES. An employer can’t apply to the FWC if the redundancy entitlements come from an award or an agreement.
For more information, check the application to vary redundancy pay form on the Fair Work Commission website.