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:

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. It doesn't include periods of unpaid leave.

Want to understand what applies for casuals? Read our Library article about whether casual service counts for redundancy pay.

Awards

Some awards have industry-specific redundancy clauses, which apply instead of the National Employment Standards (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.

Tip: Use our Notice and Redundancy Calculator

Use our Notice and Redundancy Calculator to calculate redundancy pay. This includes under your award and the NES.

Find information about redundancy entitlements in your award by selecting from the list below.

Industry Embedded Filter Placeholder

Registered agreements

If you're covered by a registered agreement, check the terms of your agreement to see how much redundancy needs to be paid out and other entitlements.

To find a registered agreement, go to the Fair Work Commission website. The Fair Work Commission (the Commission) is the national workplace relations tribunal.

When redundancy pay doesn’t apply

Under the NES, redundancy pay doesn't need to be paid in some circumstances. For example, if the employer is a small business employer or the employee is a casual.

There are exceptions to this rule for small businesses. For example, when a non-small business employer becomes a small business employer during liquidation or insolvency, they may still be required to pay redundancy to eligible employees.

To find out when redundancy doesn't need to be paid and the small business exemptions, visit Who doesn't get redundancy pay.

Reducing redundancy pay

An employer can apply to the Commission to have the amount of redundancy pay reduced if the employer:

  • finds other acceptable employment for the employee, or
  • can't afford the full redundancy amount.

Employers can only apply to the Commission if the redundancy pay comes from the NES. An employer can’t apply to the Commission if the redundancy entitlements come from an award or a registered agreement.

Learn more on the Commission's Apply to change redundancy pay page.

Source reference: Fair Work Act 2009 s.120, 121

Tools and resources

Related information

Have a workplace problem?

Problems can happen in any workplace. If you have a workplace problem, we have tools and information to help you resolve it.

For employees:

If you’ve lost your job, contact the Fair Work Commission (the Commission) first if you think you were sacked because of:

  • discrimination
  • a reason that is harsh, unjust or unreasonable
  • another protected right.

You have 21 days starting from the day after you were dismissed to lodge an application with the Fair Work Commission. Check the information at the Commission website to find out if you can apply for:

If you think you haven’t been paid everything you’re owed:

  • read about Notice and final pay to find out what you should get
  • see our Fixing a workplace problem section for practical advice on:
    • talking to your employer about fixing your notice and final pay if it’s wrong
    • getting help from us if you can’t resolve it.

For employers:

Help for small business