Know exactly what you're owed.

Redundancy pay is a legal entitlement under the Fair Work Act 2009 when your employer no longer needs your job to be done by anyone. You are entitled to redundancy pay if you have been employed continuously for at least 12 months and your employer has 15 or more employees at the time of dismissal. Casual employees and those employed for a fixed period are generally not entitled.

Redundancy pay is based on your years of continuous service and your ordinary weekly rate of pay. Under the Fair Work Act, you receive between 4 and 16 weeks of pay, depending on service length. Note that at 10+ years, the entitlement drops to 12 weeks — this reflects that long service leave entitlements typically apply at this point.

Genuine redundancy payments receive favourable tax treatment. For 2024–25, the first $12,524 of a genuine redundancy payment is completely tax-free. The next portion (up to a service-based cap) is taxed at a maximum concessional rate of 32% (including Medicare levy). Any amount above the cap is taxed at marginal rates. Annual leave and notice period pay are taxed at your normal marginal rate.

Redundancy occurs when your employer no longer requires the job to be done by anyone — it's about the role, not you personally. Dismissal (being fired) occurs because of your conduct or performance. Only genuine redundancy triggers redundancy pay entitlements. If your employer is filling your role with someone else shortly after letting you go, this may not qualify as genuine redundancy and you may have grounds for unfair dismissal.

No — small business employers are exempt. Under the Fair Work Act, employers with fewer than 15 employees at the time of dismissal are not required to pay redundancy. However, check your employment contract, award, or enterprise agreement — these may provide greater rights than the minimum standard. If in doubt, contact the Fair Work Ombudsman on 13 13 94.

All unused annual leave must be paid out regardless of why you're leaving — even if you resign or are dismissed. This is a separate entitlement from redundancy pay. Your employer must pay your annual leave balance at your ordinary rate of pay. Annual leave loading (if applicable under your award) must also be paid on this amount.

An employer can apply to the Fair Work Commission to reduce or eliminate redundancy pay in specific circumstances — for example, if they find you acceptable alternative employment with the same or similar conditions, or if they genuinely cannot afford to pay. If you believe your employer is unlawfully refusing to pay, you can lodge a complaint with the Fair Work Ombudsman (free) or seek advice from an employment lawyer.

A redundancy is genuine when three conditions are met: (1) your employer no longer requires the job to be done by anyone; (2) the employer has complied with any consultation obligations in their award or enterprise agreement; and (3) it was not reasonable to redeploy you to another position in the business or an associated entity. If any of these conditions aren't met, you may have grounds to claim unfair dismissal instead.

Act quickly — you have 21 days from the dismissal taking effect to lodge an unfair dismissal application with the Fair Work Commission. This deadline is strictly enforced. You can apply online at fwc.gov.au. The Fair Work Ombudsman (13 13 94) can provide free advice on your options. Many employment lawyers offer free initial consultations.

Generally no — redundancy payments are not ordinary time earnings and are therefore not subject to the superannuation guarantee. However, notice period pay and annual leave payouts typically are ordinary time earnings and should attract super contributions. Check your award or enterprise agreement, as some require super on all termination payments.