Redundancy · Calculator

Redundancy Tax Calculator Australia 2026-27

Estimate PAYG withholding on redundancy and employment termination payments. Separate the genuine-redundancy tax-free amount, applicable cap and estimated net payment.

2026-27 capsPreservation ageDeath benefit ETP

Need the rule explanation first? Read the 2026-27 genuine redundancy vs ETP summary, then use the calculator below.

01 —INPUTS

Eligible ETP / Redundancy Amount

Exclude salary, super and unused annual or long-service leave; they use separate rules.

Payment Type

Involuntary termination due to redundancy

Completed Years of Service

Full completed years only (part years excluded)

Date of Birth

Determines whether you reach preservation age by 30 June 2027.

Choose genuine redundancy only if the job was abolished and you were below Age Pension age (or an earlier mandatory retirement age) when dismissed.

2026-27 Schedule 11 withholding rates and ATO limits.

02 —RESULTS

Awaiting input

Enter your redundancy or ETP details to calculate tax

Edit inputs ↑

Genuine redundancy vs normal termination

Genuine redundancy

→Tax-free amount: $13,598 + $6,801 per completed year

→Eligible excess uses the ETP cap

→Employee must be below Age Pension age or an earlier mandatory retirement age at dismissal

Normal termination (not genuine)

→No genuine-redundancy tax-free limit

→Smaller of ETP and whole-of-income caps generally applies

→Within-cap withholding is 32% or 17%; above-cap withholding is 47%

How redundancy payments are taxed in Australia

When you receive a redundancy payment, it may have two parts: a tax-free component (for genuine redundancies) and a taxable component that is treated as an Employment Termination Payment (ETP). The tax-free portion is only available when the redundancy is "genuine" — meaning the employer no longer needs anyone to do the job.

Any amount above the tax-free limit is generally treated as the taxable component of an excluded life benefit ETP. That means the concessional treatment is measured against the ETP cap.

Genuine redundancy tax-free formula

Tax-free = $13,598 + ($6,801 × completed years of service)

These are the 2026-27 indexed amounts. Only completed full years count.

Tax-free amount by years of service

Years of Service	Tax-Free Amount
1 year	$20,399
5 years	$47,603
10 years	$81,608
15 years	$115,613
20 years	$149,618
25 years	$183,623
30 years	$217,628

ETP caps and PAYG withholding rates

The taxable component of a genuine redundancy payment is treated as an excluded life benefit ETP. For 2026-27, the main cap is the ETP cap of $270,000. The whole-of-income cap of $180,000 applies to non-excluded life benefit ETPs and is reduced by other taxable payments in the income year.

Component	Below preservation age	At/above preservation age
Tax-free (genuine redundancy)	0%	0%
Within ETP cap	32%	17%
Above ETP cap	47%	47%

Preservation age table

Your preservation age determines the maximum within-cap withholding rate. Schedule 11 compares it with your age on 30 June of the income year in which the payment is received:

Date of birth	Preservation age
Before 1 July 1960	55
1 July 1960 – 30 June 1961	56
1 July 1961 – 30 June 1962	57
1 July 1962 – 30 June 1963	58
1 July 1963 – 30 June 1964	59
From 1 July 1964	60

Worked example: genuine redundancy

Scenario

Sarah, age 53 at 30 June 2027 (born 15 March 1974, preservation age 60), receives a $150,000 genuine redundancy payment after 12 completed years of service. Her other taxable income this year is $40,000.

Step 1 — Tax-free $13,598 + ($6,801 × 12) = $95,210

Step 2 — Taxable $150,000 − $95,210 = $54,790

Step 3 — ETP cap Excluded ETP measured against $270,000 cap — $54,790 fully within cap

Step 4 — PAYG withholding $54,790 × 32% = $17,533 after Schedule 11 rounding

Result Estimated net after withholding: $132,467

Important: This is a PAYG withholding estimate. Final tax can differ at assessment, and most ETPs must be received within 12 months of termination.

What's included / not included

Included

→Genuine redundancy tax-free component

→Schedule 11 rates based on preservation age

→ETP cap & whole-of-income cap analysis

→Death benefit ETP (dependants/non-dependants)

→Age at 30 June from date of birth

→Estimated PAYG withholding and net payment

Not included

→Unused annual / long service leave (separate rules)

→Tax offsets such as LITO

→Multiple ETPs in one year

→Invalidity segment of ETP

→Pre-July 1983 service component

→Non-resident tax rates

→Early retirement scheme payments

What happens next?

Got unused annual leave?

Calculate tax on your unused annual leave and long service leave payout.

Calculate leave tax →

Reinvesting your payout?

See how your redundancy payout could grow in super or investments.

Plan retirement →

Starting as a sole trader?

Many redundancy recipients go freelance. Estimate your ABN tax.

Sole trader tax →

What about your HELP debt?

Lump sum payments can trigger HELP repayments. Check your threshold.

Check HELP impact →

Need the payout amount first? Calculate your NES redundancy weeks and notice pay.

FAQ

What is a genuine redundancy payment?

A genuine redundancy payment is made to an employee whose position has been made genuinely redundant. It includes a tax-free component calculated as $13,598 plus $6,801 for each completed year of service (2026-27 rates). To qualify, the dismissal must be because the employer no longer requires the job to be done by anyone, not because of poor performance.

How much of my redundancy is tax-free?

For 2026-27, the tax-free amount is $13,598 plus $6,801 for each completed year of service. For example, with 10 completed years: $13,598 + ($6,801 x 10) = $81,608 tax-free. Any amount above this limit is taxed as an Employment Termination Payment (ETP).

What is the ETP cap?

The ETP cap for 2026-27 is $270,000. For excluded payments such as the taxable part of a genuine redundancy payment, that cap is generally used on its own. For non-excluded life benefit ETPs, the effective cap may instead be the lesser of $270,000 or $180,000 minus other taxable payments. Schedule 11 withholding above the applicable cap is 47%.

What is preservation age and how does it affect ETP withholding?

Preservation age ranges from 55 to 60 depending on date of birth. Schedule 11 tests your age on the last day of the income year in which you receive the ETP. The within-cap withholding rate is 17% if you are at or above preservation age then, or 32% if you are below it.

How are death benefit ETPs taxed?

For a dependant, the taxable component is tax-free up to the $270,000 death-benefit ETP cap and 47% is withheld above it. For a non-dependant, 32% is withheld within the cap and 47% above it. Any separate tax-free component remains tax-free.

What is the whole-of-income cap?

The whole-of-income cap of $180,000 mainly limits concessional treatment for non-excluded life benefit ETPs. If your payment is a genuine redundancy excess, it is generally treated as an excluded ETP and uses the ETP cap instead. For a non-excluded payment, if your other taxable income is $100,000, the whole-of-income limit would reduce the effective cap to $80,000.

Is the withholding estimate my final tax?

Not necessarily. Schedule 11 withholding rates include Medicare levy and determine what the payer withholds. A life-benefit ETP is assessable income and a tax offset limits its maximum tax rate, so your final assessment can differ with your full-year circumstances.

Are these calculations updated for 2026-27?

Yes. This calculator uses the 2026-27 ATO genuine redundancy tax-free limits ($13,598 base + $6,801 per year), the $270,000 ETP cap, and the $180,000 whole-of-income cap. These figures are indexed annually by the ATO.

How is a genuine redundancy payment taxed in Australia?

A genuine redundancy payment has a tax-free amount based on completed years of service. For 2026-27, the limit is $13,598 plus $6,801 for each completed year. Eligible excess is an excluded life-benefit ETP and uses the $270,000 ETP cap.

What is the difference between a genuine redundancy and an ETP?

A genuine redundancy occurs when your position is abolished — the employer no longer needs anyone to do your job. The tax-free component only applies to genuine redundancies. If you are fired, resign, or take a voluntary separation that does not meet the genuine redundancy criteria, the entire payment is treated as an ETP with no tax-free portion.

Does my redundancy payout affect my HELP/HECS repayment?

The taxable component of an ETP can affect your repayment income, while the tax-free amount of a genuine redundancy is not assessable income. Use the HELP calculator with your full-year repayment income rather than adding the entire gross payout.

Can I salary sacrifice my redundancy payout into super?

You cannot retrospectively salary sacrifice a redundancy payment. You may be able to make a personal super contribution after receiving it and claim a deduction if the contribution and notice requirements are met. Check your available 2026-27 concessional cap before contributing.

Is unused annual leave taxed differently from redundancy?

Yes. Unused annual leave and long service leave are not ETPs and use separate withholding schedules. In qualifying genuine-redundancy cases, some unused-leave amounts have a maximum 32% withholding rate including Medicare levy; accrual dates and payment type matter.

Tax Accuracy & Sources

Reviewed: 17 July 2026 · Tax year: 2026-27

Estimates Schedule 11 PAYG withholding on eligible genuine redundancy payments and ETPs. It is not a final income-tax assessment and does not cover unused leave, multiple ETPs, invalidity segments, pre-July 1983 service components, delayed payments, foreign residents or payments through a deceased estate.

Redundancy Tax Calculator Australia 2026-27

Tax Accuracy & Sources

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