Redundancy Payment Calculator Australia

(last updated 30/06/2015)

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Redundancy Payment - Lump Sum D

A genuine redundancy payment is a payment you receive because the job you were doing is abolished. That is, your employer has made a decision that the job you are doing no longer exists and your employment is to be terminated. The Genuine Redundancy Paymnet is shown as Lump Sum D on your PAYG Paymnet Summary.

A genuine redundancy has special tax treatment under the tax law where an amount paid up to a limit (or CAP) is tax free. If your redundancy does not meet the definition of genuine redundancy then it will be taxed under the normal employment termination payment (ETP) rules - see our post on Tax Table of ETP's.

A genuine redundancy payment is made up of two components:
  1. A TAX FREE amount and 
  2. An assessable amount==> see our post Tax Rates On Excessive Redundancy Component
Tax Free Amount of Redundancy Payment:
To work out the tax free amount of a Genuine Redundancy Payment use the following formula:

Base amount + (service amount × years of service)

Below is a table setting out the Base Rates and Service Limits for a number of years.

Example - the tax free component for 2013 would be $8806 + ($4404 x years of service)


Income year
Base limit
For each complete year of service
2015-16
$TBA
$TBA
2014-15
$9,514
$4,758
2013-14
$9,246
$4,624
2012-13
$8,806
$4,404
2011-12
$8,435
$4,218
2010-11
$8,126
$4,064
2009-10
$7,732
$3,867


The tax free amount is non-assessable/non-exempt income - ie it is not included as normal taxable income in your tax return but is included as exempt income.

Note: the base amount and the service amount are indexed annually.

Assessable amount of Redundancy Payment:

The amount in excess of the tax free amount of a genuine redundancy payment is taxed at specified rates - see this post for details on Tax Rates on component in excess of the TAX FREE amount.

See this post for details on Preservation Age.

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:
For help with your eTax return see our eTax Return Checklist.

Web Based Tax Return App:

A benefit of using eZtax, our web based tax return app, is we have the genuine online tools, knowledge and experience to get the best tax refund for our clients, making it easy to complete your annual tax return online.

Our Web Based Tax Return App will step you through all the necessary questions to increase your  tax refund estimate and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started! 

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