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NZ Redundancy Pay Calculator

Calculate your estimated redundancy compensation and see the tax impact on your lump sum payout.

lightbulb Based on standard NZ Employment Law & IRD Tax Rules
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Redundancy is taxed as "Extra Pay" based on your total annual income.

Payout Breakdown

Base Compensation $0.00 0 weeks @ $0/wk
Payment in Lieu of Notice $0.00
Total Gross Payout $0.00
Estimated Tax (PAYE) -$0.00
Estimated Net Redundancy $0.00

⚠️ Legal Disclaimer: This tool provides an estimate only and does not constitute financial, tax, or legal advice.

Read full disclaimer

Redundancy compensation is not a statutory requirement in New Zealand; it depends entirely on the terms of your individual or collective employment agreement.

This tool estimates the tax on a "redundancy payment" (lump sum) based on standard IRD "extra pay" rates, which may differ if you have other income sources or specific tax hurdles (like student loans or child support). We accept no liability for any loss, damage, or discrepancy arising from the use of this tool. Always verify with your employer or a qualified professional.

Frequently Asked Questions

Common clarifications and helpful advice for non-experts.

Is redundancy pay legally required in NZ?

No. There is no legal requirement to pay redundancy compensation in NZ unless it is explicitly written in your employment agreement (contract).

How is redundancy pay taxed?

It is treated as 'Extra Pay' and taxed at your marginal rate (PAYE). However, it is not subject to ACC levies or KiwiSaver deductions unless you choose to.

What is 'Notice in Lieu'?

This is when your employer pays you for your notice period instead of requiring you to work it. You effectively finish immediately but get paid as if you worked the notice weeks.

Can I be made redundant while on sick leave?

Yes, but the company must follow a fair process. Redundancy is about the 'role' being unnecessary, not your personal situation or performance.

Will redundancy affect my student loan?

Yes. Deductions will be taken from your total gross payout at the standard 12% rate for everything over the threshold.

What if I find another job before my redundancy date?

You can ask for an earlier finish date, but technically you are bound by your notice period. Many employers will agree to an early exit to save on costs.

External Resources

Make the most of your transition with these popular New Zealand resources.

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Redundancy Process →

Legal requirements for fair selection and employer duties.
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Payout Taxation →

Official IRD guidance on how your lump sum will be taxed.
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Workplace Problems →

Official guidance on resolving disputes and mediation services.