What is redundancy payment?
In Australia, redundancy payment is a financial compensation that is given to employees who are made redundant from their jobs. It is meant to provide them with financial support during the transition period between jobs. The amount of redundancy payment is usually calculated based on the employee’s length of service with the employer, their age, and their base rate of pay. Redundancy payments are usually made in addition to any notice period or other entitlements that the employee may have..
How much is a redundancy payment?
Redundancy payment is given to employees in accordance with the length of their continuous employment with their company. For regular hours worked, this amount is paid to the employee at their base pay rate.
The compensation that an employee receives for working their regular hours is their base rate of pay, unless they are a pieceworker. It excludes the following:
- incentive-based payment and bonuses
- loadings
- monetary allowances
- overtime or penalty rates
- any other separately identifiable amounts.
|
Period of continuous service |
Redundancy pay |
|
At least 1 year but less than 2 years |
4 weeks |
|
At least 2 years but less than 3 years |
6 weeks |
|
At least 3 years but less than 4 years |
7 weeks |
|
At least 4 years but less than 5 years |
8 weeks |
|
At least 5 years but less than 6 years |
10 weeks |
| At least 6 years but less than 7 years |
11 weeks |
| At least 7 years but less than 8 years |
13 weeks |
| At least 8 years but less than 9 years |
14 weeks |
| At least 9 years but less than 10 years |
16 weeks |
| At least 10 years |
12 weeks |
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