Redundancy Calculator NZ 2025/26
Calculate your notice pay, annual leave payout, and any contractual redundancy payment. New Zealand has no statutory redundancy — your agreement is everything.
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How to Use This Calculator
Tab "My Rights"
Enter your annual salary, years of service, notice period, and unused annual leave. Select whether your employment agreement has a redundancy clause, and if so, how it is structured (weeks per year of service, or a fixed lump sum). The calculator shows your minimum legal entitlements and total estimated payout.
Tab "Negotiation"
If your agreement has no redundancy clause, this tab shows you what to ask for. It models conservative (2 weeks/year), typical (3 weeks/year), and generous (4 weeks/year) voluntary packages, and compares NZ outcomes to UK and Australian statutory minimums — highlighting the gap NZ workers face.
Tab "Tax Impact"
Shows how PAYE applies to your total redundancy package. New Zealand taxes all redundancy payments as ordinary income — there is no exemption. This tab estimates tax using the lump sum withholding method and shows your net (after-tax) payout.
The Key Facts
Notice pay = Weekly pay × notice weeks
Annual leave payout = Daily pay × unused leave days
What requires a contractual clause:
Redundancy payment = Weekly pay × weeks per year × years of service
(or a fixed lump sum as specified in the agreement)
Weekly pay: Annual salary ÷ 52
Daily pay: Annual salary ÷ 260 (52 weeks × 5 days)
Tax (lump sum withholding):
PAYE is calculated as if the lump sum is added to your annual salary
No exemption — all redundancy income is fully taxable in NZ
Entitlements under the Employment Relations Act 2000 and Holidays Act 2003. Income tax using 2025/26 NZ brackets.
Example
No redundancy clause — $75,000 salary, 3 years, 4 weeks notice, 10 days leave
Most NZ employees are in this position. The employer owes nothing beyond notice and leave.
Compare this to the UK, where a 3-year employee at equivalent earnings would receive approximately £4,350 in statutory redundancy pay on top of notice — a legal floor NZ does not have.
NZ Has No Statutory Redundancy Pay — What This Means
This is the most important thing to understand about redundancy in New Zealand: there is no legal minimum. When Parliament passed the Employment Relations Act 2000, it deliberately did not include a redundancy payment entitlement. The rationale was to leave it to negotiation between employers and employees.
In practice, this means:
- If your employment agreement says nothing about redundancy, your employer can make you redundant and legally owe you only notice and annual leave.
- Most NZ employment agreements — especially standard template agreements — have no redundancy clause at all.
- Voluntary redundancy packages (where employers offer something anyway) typically range from 2–4 weeks per year of service, but this is entirely at the employer's discretion unless written into your agreement.
- Senior employees and those in unionised workplaces are more likely to have redundancy clauses.
The key insight: negotiate your redundancy clause before you need it — during onboarding, a pay review, or a contract renewal. Once a restructure is announced, your bargaining position is essentially zero.
NZ vs UK vs Australia — Redundancy Comparison
| Country | Statutory Redundancy? | Minimum (3 yrs service, $75K/yr equiv.) | Notes |
|---|---|---|---|
| New Zealand | No | $0 (contractual only) | Notice + leave mandatory; redundancy requires clause |
| Australia | Yes | ~AUD $4,327 (5.2 weeks) | Fair Work: graduated scale 4–16 weeks depending on service |
| United Kingdom | Yes | ~£4,350 (3 weeks, age-weighted) | 0.5–1.5 weeks per year depending on age, capped at £643/week |
Comparison illustrative only. Actual entitlements vary by age, capping rules, and individual circumstances. NZ figures assume no redundancy clause in the employment agreement.
What a Fair Redundancy Process Looks Like
Even with no statutory pay, your employer must follow a fair process under the Employment Relations Act 2000. A genuine redundancy requires:
- Genuine business reason: The role must truly be surplus to requirements — not a pretext for dismissal.
- Good faith consultation: You must be told about the proposed changes and given a genuine opportunity to comment before a final decision is made.
- Alternatives considered: The employer must consider redeployment or other roles before confirming redundancy.
- Transparent selection: If multiple roles are at risk, the selection criteria must be fair and consistently applied.
If the process is not followed correctly, you may have a personal grievance for unjustified disadvantage or unjustified dismissal — even if the role was genuinely surplus. The Employment Relations Authority (ERA) can award remedies including lost wages and compensation for hurt and humiliation.
Tax Treatment of Redundancy in New Zealand
Unlike Australia (where redundancy payments have a tax-free component) or the UK (where the first £30,000 of redundancy is exempt), New Zealand taxes all redundancy payments as ordinary income. There is no exemption.
Lump sum redundancy payments are taxed using the lump sum withholding method: your employer calculates the tax rate by treating the lump sum as if it were added to your annual salary, and applies that marginal rate. This prevents the payment from being taxed at an artificially low rate.
However, if you are made redundant mid-year and earn less than expected, you may be due a refund at the end of the tax year when you file your return — because your total annual income was lower than the PAYE deducted assumed.