Redundancy with or without severance: which payments are separate?

Published by SESAY · 2026-10-07 · General Australian payroll guidance

What to understand first

Redundancy pay eligibility must be assessed separately from wages, leave and notice. Entitlements depend on the applicable rules and facts; some employees are excluded from statutory redundancy pay. A business restructuring announcement alone does not settle the amount payable or whether a dismissal is a genuine redundancy.

Practical checks

• Ask which rule determines redundancy-pay eligibility.
• Check service dates and the basis of any exclusion.
• Assess notice and other final entitlements separately.
• Keep the employment-law decision distinct from the tax classification of payments.

Fictional example

A fictional employee is told that no severance payment applies. Payroll does not stop the final-pay review there: it checks outstanding wages, unused annual leave and any notice entitlement. HR obtains advice on the asserted exclusion. The employee receives a component-by-component explanation rather than one unexplained zero redundancy line.

Your next step

Employees should ask for the reason and governing rule if redundancy pay is excluded. Employers should ensure consultation and redeployment considerations are handled by the appropriate decision-makers. Payroll calculates approved entitlements; it should not independently determine that a redundancy is legally genuine or that a payment is tax-free based only on its label.

How SESAY can help

SESAY can help prepare transparent exit workpapers and coordinate payroll questions with HR, Finance and relevant advisers.

Official sources

• Fair Work — Redundancy
• Fair Work — Final pay

Sources researched 2026-10-07. Examples are fictional and use stated assumptions. Confirm current rules and your circumstances before acting. This is general information, not individual tax or legal advice. SESAY is independent of the regulators linked here.