Offered a voluntary redundancy? Here is how to decide.

A voluntary redundancy is the one redundancy decision you get to make yourself, and it comes with a deadline. Your employer has said the team is getting smaller, put a package on the table, and given you a window to say yes. You still have a job today. That is what makes this different from being made redundant, and it is also what makes it hard: the safe-looking choice is to do nothing and hope the next round passes you by.

Most people in this position ask two questions. Is the money fair, and what would I do next. This page answers the first one with what Fair Work and the ATO publish. It is honest that the second one is the harder question, and it is the one most people leave until after they have signed.

This is general information, not legal, tax or financial advice. Verify anything that affects your decision with Fair Work (13 13 94), the ATO (13 28 61) or a registered adviser.

A voluntary redundancy is still a redundancy. Your employer is ending the job because it no longer needs the job done, and the National Employment Standards apply the same way they would if you had not volunteered. That means the NES redundancy pay scale is the floor: 4 weeks at one year of continuous service, rising to 16 weeks at nine years and 12 weeks at ten or more, at your base rate. On top of that you are owed your notice period or payment in lieu, any untaken annual leave, and long service leave under your state or territory rules.

Many employers offer more than the NES scale to encourage people to volunteer, sometimes as extra weeks per year of service and sometimes as a lump sum. That extra is a business decision, not a legal entitlement, so it can differ between rounds and between people. Ask for the whole package in writing, itemised: redundancy pay, notice, leave, super, and anything on top. Then put your own numbers against the NES scale with the payout calculator on this site, so you know which part of the offer is the law and which part is the sweetener.

Source: Fair Work Ombudsman, fairwork.gov.au/ending-employment/redundancy/redundancy-pay. Small businesses with fewer than 15 employees are exempt from NES redundancy pay, though an award or agreement may still provide it.

It can be. The ATO treats a payment as a genuine redundancy payment when your position is genuinely being abolished, you are under the age pension age when you leave, there is no arrangement to re-employ you, and the payment is what an employer would pay at arm's length. A voluntary redundancy can meet all four. Whether yours does depends on the facts, and the ATO is the place to check.

If it does, part of the payment is tax-free. For the 2026 to 2027 income year (payments from 1 July 2026) the tax-free limit is A$13,598 plus A$6,801 for each completed year of service (ATO, genuine redundancy and early retirement scheme payments). Ten completed years puts the tax-free limit at A$81,608. For 2025 to 2026 it was A$13,100 plus A$6,552 a year. Anything above the limit is an employment termination payment taxed at concessional rates up to a cap, then at the top rate of 47 per cent. Unused annual leave and long service leave paid out on a genuine redundancy are also taxed at concessional rates.

If the redundancy is not genuine, for example because the role is being refilled under another title, the whole payment is taxed as an ordinary termination payment and the tax-free limit does not apply. That is one reason to ask, before you sign, whether the role is actually going.

Source: ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/leaving-your-job/genuine-redundancy-payments. The limits change each financial year; verify the current figures.

A large payout does not stop you applying for JobSeeker Payment, but it usually delays when payments start. Services Australia applies an income maintenance period: your redundancy pay and any leave paid out are treated as income for the number of weeks they represent, and JobSeeker does not start until that period ends. Fourteen weeks of redundancy pay and four weeks of leave is eighteen weeks. A liquid assets waiting period of up to 13 weeks can apply as well, depending on what you hold in cash and savings.

Apply as soon as you finish, not when the money runs out, because the waiting periods run from the date you claim. Check the current rules at servicesaustralia.gov.au/income-maintenance-period or call 132 850.

Is the full offer in writing, itemised, with the NES minimum shown separately from anything extra. How long do I have to decide, and can I have that in writing too. Is my role actually being abolished, or will someone else be doing it under a different title. What happens to the people who stay: has the team gone from 40 to 18 before, and what did the next round look like. Is the package negotiable: some employers will improve an offer for long-serving staff or to close a round quickly, and asking costs nothing. And the sixth, which is the one this site exists for: if I take this, what would I move into.

If any answer to the first five worries you, talk to your union if you are in one, or a community legal centre. Fair Work can answer general questions on 13 13 94.

A package buys time. It does not buy a next job, and the same Jobs and Skills Australia study that describes why teams like yours are shrinking names clerical, administrative and customer communications work as the most automatable in the country (Our Gen AI Transition, August 2025). Taking the package and looking for the same job somewhere else is the plan most people make by default, and it is the one that runs the payout down.

Before you decide, spend three minutes on the free career change check. It reads the job you have now, says which parts of it are exposed and which parts are hardest to automate, then names three Australian jobs your experience points toward and why each one. You will know what you would be moving toward before you sign anything.