Redundancy Pay Tax Calculator
Estimate how much tax you will pay on a genuine redundancy payment, including the tax-free component and ETP tax rates.
Last verified: 5 May 2026Reviewed by the Savings Mate editorial team — figures fact-checked against the ATO, Services Australia and ASIC MoneySmart.
How much tax do I pay on a redundancy payment in 2025-26?
A genuine redundancy payment gets a tax-free slice of $12,524 base + $6,261 per completed year of service (2025-26). Anything above this tax-free cap is treated as an Employment Termination Payment (ETP) — taxed at 15% (+2% Medicare) up to $260,000 (2025-26 ETP cap) if you are at/above preservation age 60, or 30% + 2% under 60, then 45% above the cap. Unused annual and long-service leave paid out is taxed separately at a flat 32% marginal rate. Source: Australian Taxation Office.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.
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