Over 45: one more week of notice
The NES minimum notice period runs from 1 to 4 weeks depending on service. If you are over 45 and have at least 2 years of continuous service with the employer, you get 1 extra week. With 15 years' service, a 44-year-old is owed 4 weeks' notice and a 46-year-old 5. When notice is paid out instead of worked, that is an extra week's pay in the final pay.
60: preservation age and the 17% rate
A genuine redundancy is tax-free up to $13,598 plus $6,801 per completed year of service. Anything above that is a taxable employment termination payment (ETP). Up to the $270,000 ETP cap, it is withheld at 32% if you are under preservation age and 17% if you have reached it. Preservation age is 60 for everyone born after 30 June 1964, and it is tested at the end of the income year the payment is made in.
67: age-pension age and the lost tax-free amount
A payment only counts as a genuine redundancy for tax if you are dismissed before age-pension age, which is 67 for everyone born on or after 1 January 1957. At or over that age there is no tax-free component. The whole payment becomes an ordinary ETP, the smaller of the ETP cap and the whole-of-income cap applies, and unused leave is taxed at marginal rates rather than the flat 32% that applies on a genuine redundancy.
One package at three ages
Here is the same package, $2,200 a week with 15 completed years and a $150,000 ex-gratia top-up on the NES weeks, calculated at three ages:
| Age | Gross | Tax-free | Taxable ETP | Tax | Net |
|---|---|---|---|---|---|
| 46 | $176,400 | $115,613 | $60,787 | $19,452 | $156,948 |
| 61 | $176,400 | $115,613 | $60,787 | $10,334 | $166,066 |
| 67 | $176,400 | $0 | $176,400 | $29,988 | $146,412 |
Between 46 and 61 the gross doesn't change, but the tax falls from $19,452 to $10,334 because the taxable part moves from 32% to 17%. At 67 the tax-free amount disappears and the tax rises to $29,988. (That figure assumes no other taxable income in the same financial year: salary already paid that year shrinks the whole-of-income cap, and anything above the reduced cap is taxed at the top rate.)
What to check if you're near a birthday
- Near 45: the extra notice week applies once you are over 45 with at least 2 years' service. If your birthday falls close to the termination date, confirm the timing with the Fair Work Ombudsman.
- Near 60: the test is at 30 June of the payment year, so a payment in May can still get the lower rate if you turn 60 in June.
- Near 67: the genuine redundancy test is about your age when you are dismissed. There is no end-of-year rule here.
Frequently asked questions
Does the over-45 extra week apply to casuals?
No. Casuals are not entitled to notice of termination under the NES, so there is no extra week either.
Which age counts for the 17% rate: my age on the day I leave?
No. Preservation age is tested at the end of the income year in which the payment is made. If you turn 60 before 30 June of that year, the lower rate applies. The calculator uses your age at termination, so check borderline birthdays.
I'm 67. Do I still get the NES redundancy weeks?
Yes. Age doesn't change the NES entitlement. It changes the tax: at or over age-pension age the payment can't be a genuine redundancy for tax purposes, so there is no tax-free amount.
Is the Medicare levy included in these rates?
Yes. The ETP withholding rates of 32% and 17% (and 47% above the cap) include Medicare.
Related
- How redundancy is taxed — the three layers in detail
- Notice periods and pay in lieu
- What makes a redundancy genuine
Sources
Figures on this page come from the following primary sources. The date is when we last checked the page against the source.
- Notice and ending employment (dismissal) (Fair Work Ombudsman), checked 24 September 2026.
- Redundancy pay and entitlements (Fair Work Ombudsman), checked 7 August 2026.
- Schedule 11: tax table for employment termination payments (ATO), checked 7 August 2026.
- Key superannuation rates and thresholds: employment termination payments (ATO), checked 7 August 2026.
- Genuine redundancy payments (ATO), checked 10 August 2026.
- Redundancy and early retirement (for employers) (ATO), checked 7 August 2026.
- Schedule 7: tax table for unused leave payments on termination (ATO), checked 7 August 2026.
Independent guide — not a government service, and not financial, legal or tax advice.