Redundancy Payment

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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Read more: 

A Guide to ETP (Employment Termination Payments)

The Ultimate Employee Redundancy Guide