New Zealand Redundancy & Final Pay Calculator

Use the calculator to estimate:

• Redundancy compensation
• Payment in lieu of notice
• Unused annual leave
• Leave accrued since your last anniversary
• Other outstanding wages or payments
• Gross final payment
• Estimated PAYE
• KiwiSaver deduction
• Estimated net final payment

The calculator is designed for New Zealand employees and uses the information you provide rather than assuming that every employee receives the same redundancy package.

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How Does the NZ Redundancy & Final Pay Calculator Work?

The calculator breaks your final payment into separate components because each part can be treated differently.

The basic calculation is:

Net final payment = Gross final payment − PAYE − KiwiSaver and other applicable deductions

Your gross payment may contain several different components:

Gross final payment = redundancy compensation + notice pay + annual leave + leave-related payment + other amounts owing

Not every employee will have every component.

For example, an employee whose employment agreement contains no redundancy clause may receive notice pay and holiday entitlements but no contractual redundancy compensation.

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1. Enter Your Current Annual Gross Salary

The first figure required is your current annual gross salary.

For example:

Annual salary = $85,000

Your calculator then converts this into an estimated ordinary weekly salary:

Weekly pay = Annual salary ÷ 52

So:

$85,000 ÷ 52 = $1,634.62 per week

This weekly figure is used by the calculator when estimating payments such as notice pay and accrued leave under its calculation assumptions.

Your actual final-pay calculation can be different if your employment agreement, payroll rules or holiday-pay calculation uses different earnings measures.

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2. Enter Your Completed Years of Service

The calculator asks for your completed years of service.

This matters because redundancy clauses commonly calculate compensation according to completed years.

For example, suppose your agreement says:

2 weeks’ pay for every completed year of service, capped at 16 weeks.

If you have worked:

• 1 year 10 months → 1 completed year
• 3 years 2 months → 3 completed years
• 3 years 9 months → 3 completed years
• 8 years → 8 completed years

The calculator does not automatically count partial years as full years.

This is particularly important when estimating redundancy compensation.

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3. Does Your Employment Agreement Include Redundancy Compensation?

This is one of the most important questions in the calculator.

There is no automatic statutory redundancy payment in New Zealand

Unlike some countries, New Zealand does not provide a general statutory redundancy payment simply because an employee loses their job through redundancy.

Employment New Zealand states that redundancy compensation depends on the applicable employment agreement and any negotiations with the employer.

Your agreement may contain a specific redundancy clause explaining:

• whether redundancy compensation is payable
• how compensation is calculated
• how many weeks are paid per completed year
• whether there is a maximum number of weeks
• whether there are minimum service requirements
• how the employee’s ordinary remuneration is defined

Look through your employment agreement for headings such as:

• Redundancy
• Restructuring
• Redundancy Compensation
• Termination
• Compensation on Termination
• Business Change

If you cannot find anything, check any collective agreement or workplace policy that forms part of your employment terms.

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4. How Redundancy Compensation Is Calculated

If your agreement provides redundancy compensation, the calculator uses the basic structure:

Redundancy compensation = Weekly pay × weeks per completed year × completed years

subject to any maximum specified by your agreement.

Example

Suppose:

• Salary = $85,000
• Weekly salary = $1,634.62
• Service = 3 completed years
• Redundancy entitlement = 2 weeks per year
• Maximum = 16 weeks

The number of compensation weeks is:

2 × 3 = 6 weeks

Estimated redundancy compensation:

$1,634.62 × 6 = $9,807.72

So the estimated redundancy component would be approximately $9,808.

What if you have a maximum cap?

Suppose the agreement says:

2 weeks per completed year, maximum 16 weeks.

An employee with 10 completed years would theoretically receive:

2 × 10 = 20 weeks

But because the agreement caps compensation at 16 weeks, only 16 weeks would be used.

This is why you should enter the exact terms of your employment agreement rather than assuming that the calculator’s default settings apply to you.

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5. Notice Pay in Your Final Payment

Notice is separate from redundancy compensation.

Employment New Zealand says an employee being made redundant must generally receive the notice specified in their employment agreement, unless the parties agree to waive the notice period. If the agreement does not specify a notice period, reasonable notice may apply.

Your calculator asks:

How is your notice being handled?

There are two important possibilities.

Working your notice

If you continue working during the notice period, you normally receive your ordinary wages while working.

That amount is not treated as an additional lump-sum payment in the same way as payment in lieu.

Paid in lieu of notice

If your employer ends your employment immediately and pays you instead of requiring you to work the notice period, the calculator estimates:

Notice pay = Notice weeks × weekly pay

For example:

• Annual salary = $85,000
• Weekly pay = $1,634.62
• Notice = 4 weeks

Then:

$1,634.62 × 4 = $6,538.48

Estimated notice payment:

$6,538

This can make a substantial difference to your final payout.

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6. Unused Annual Leave

Your final pay can also include unused annual holidays.

Employment New Zealand states that final pay must include unused annual holidays and other entitlements owing to the employee.

If the calculator asks for accrued annual leave in weeks, the estimate is based on the weekly pay figure used by the calculator:

Annual leave payout = Leave weeks × weekly pay

Example

Suppose you have:

3.2 weeks of unused annual leave

and your ordinary weekly pay is:

$1,634.62

Then:

3.2 × $1,634.62 = $5,230.78

Estimated annual leave component:

$5,231

Important holiday-pay point

Actual annual holiday pay can be more complicated than simply multiplying weeks by ordinary weekly pay. Employment New Zealand explains that annual holiday pay can involve ordinary weekly pay and average weekly earnings, with the greater applicable amount used in relevant circumstances.

This means the calculator should be treated as an estimate rather than a payroll replacement.

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7. Leave Accrued Since Your Last Anniversary

There is another important component that is easy to overlook.

If you have worked part of a year since your last annual-holiday entitlement anniversary, your final pay can include an additional holiday-pay calculation.

Employment New Zealand states that where an employee has worked a part-year since their last entitlement anniversary, final pay includes 8% of total before-tax earnings for the relevant period, subject to the applicable adjustments and rules.

The calculator therefore asks for:

Gross earnings since your last leave anniversary

The basic calculation is:

Leave-related payment = 8% × gross earnings

Example

Suppose your gross earnings since the anniversary are:

$30,000

Then:

$30,000 × 8% = $2,400

Estimated leave-related payment:

$2,400

This amount is separate from an existing unused annual-leave balance.

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8. Other Outstanding Wages or Expenses

Your final pay may contain other amounts your employer still owes you.

Examples can include:

• unpaid salary
• approved expenses
• certain allowances
• outstanding wages
• other contractual payments

The calculator provides an input for these additional amounts.

If you are owed:

$500

that amount can be added to the estimated gross final payment.

Employment New Zealand states that final pay must include final wages, holiday pay and other payments owing.

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9. Calculating the Gross Final Payment

Once the individual components have been calculated, they are combined.

A simplified version is:

Gross final payment =

Redundancy compensation

• Notice pay
• Annual leave payout
• Leave-related payment
• Other outstanding amounts

Example

Imagine an employee has:

Component	Estimated amount
Redundancy compensation	$9,808
Notice pay	$6,538
Annual leave	$5,231
Leave-related payment	$1,680
Other amounts	$500
Gross final payment	$23,757

The gross figure is not the amount that necessarily reaches your bank account.

Taxes and applicable deductions must still be considered.

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10. How PAYE Tax Works on Redundancy and Final Pay

One of the most important parts of the calculator is the estimated tax deduction.

A redundancy payment is taxable income in New Zealand. Inland Revenue states that employers should generally deduct tax from redundancy payments, and your end-of-year tax position may ultimately result in a refund or additional tax depending on your circumstances.

Redundancy and other end-of-employment lump sums are handled differently from ordinary weekly PAYE calculations.

Inland Revenue specifically provides a separate calculation method for lump-sum payments at the end of employment.

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11. New Zealand Income Tax Rates for 2026/27

For the 2026/27 tax year, the individual income-tax thresholds are:

Taxable income	Income tax rate
$0 – $15,600	10.5%
$15,601 – $53,500	17.5%
$53,501 – $78,100	30%
$78,101 – $180,000	33%
$180,001+	39%

These are the current individual income-tax rates published by Inland Revenue.

However, do not simply apply these rates manually to your entire final payment. End-of-employment lump sums have specific PAYE rules.

Inland Revenue’s 2026/27 lump-sum table distinguishes payments subject to the ACC earners’ levy from payments such as redundancy payments that are exempt from that levy.

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12. Redundancy Compensation and ACC

A particularly important distinction is the treatment of redundancy compensation.

Inland Revenue states that redundancy payments do not have the ACC earners’ levy applied to them, while most other lump-sum payments can have the levy.

For 2026/27, the ACC earners’ levy rate is 1.75%, with the levy applying up to the applicable maximum liable earnings threshold of $156,641.

This distinction matters when estimating the net amount you receive.

Important calculator update: your original explanation refers to a 1.67% ACC rate, but the current 2026/27 official rate is 1.75%. If the calculator’s JavaScript currently uses 1.67%, I recommend updating the calculation before publishing this article.

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13. KiwiSaver and Redundancy Payments

KiwiSaver is another reason your gross final payment may be different from the amount deposited into your bank account.

Inland Revenue specifically states that KiwiSaver contributions are not deducted from a redundancy payment.

Inland Revenue also identifies redundancy payments as being excluded from gross pay for KiwiSaver purposes.

However, other salary and wage components can be subject to KiwiSaver deductions.

Current employee contribution rates include:

• 3.5%
• 4%
• 6%
• 8%
• 10%

The default rate is currently 3.5% where an employee has not selected another applicable rate.

Therefore, the calculator separates redundancy compensation from the ordinary-pay portion rather than simply applying KiwiSaver to the entire gross redundancy package.

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14. Why Your Net Payment Can Be Much Lower Than Your Gross Payment

It is very common to look at a redundancy offer and think:

“I’m getting $25,000.”

But the amount actually received can be considerably lower.

For example:

Gross final payment: $25,000

Less:

• PAYE
• KiwiSaver where applicable
• student loan deductions where applicable
• other lawful deductions

The result is your estimated net final payment.

This is why calculating the net amount can be more useful for financial planning than looking only at the redundancy package advertised by your employer.

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15. What If You Have a Student Loan?

The current calculator does not include student-loan deductions.

If you have a New Zealand student loan, additional deductions may apply depending on your tax code, earnings and the nature of the payment.

For the 2027 tax year (1 April 2026 to 31 March 2027), the annual repayment threshold is $24,128. For a main-job SL tax code, the repayment calculation generally applies 12% to earnings above the relevant repayment threshold.

Because student-loan treatment can depend on the payment and payroll circumstances, the calculator deliberately does not attempt to incorporate every student-loan scenario.

If you have a student loan, treat the calculator’s net figure as an estimate and check your actual final payslip.

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16. What Happens If Your Employment Agreement Says Nothing About Redundancy?

This is one of the most searched questions about redundancy in New Zealand.

If your agreement does not provide redundancy compensation, there is generally no automatic contractual redundancy payment simply because your position has been made redundant. Employment New Zealand explicitly states that redundancy compensation depends on the applicable agreement and negotiations.

However, that does not mean you receive nothing.

Your final pay can still include amounts such as:

• wages owing
• notice or payment in lieu of notice
• unused annual holidays
• other contractual entitlements

Employment New Zealand confirms that final pay must include unused annual holidays and other entitlements owing.

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17. Can You Negotiate Redundancy Compensation?

Yes, redundancy compensation can sometimes be negotiated.

An employer may offer a redundancy package even where the employment agreement does not specify a particular payment.

The amount may depend on factors such as:

• length of service
• seniority
• salary
• notice period
• circumstances of the restructuring
• employer policy
• negotiations between the parties

In some restructuring situations where an employment agreement is silent on redundancy entitlements, Employment New Zealand notes that the Employment Relations Authority can become involved if the parties cannot agree.

The important point is that negotiated compensation is different from an automatic statutory redundancy entitlement.

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18. What Should You Check Before Accepting Your Final Pay?

If you have received a redundancy letter or settlement proposal, compare the employer’s calculation against your employment agreement.

Check:

1. Salary

Is the salary used in the calculation correct?

2. Service

Are your completed years of service correct?

3. Redundancy clause

Does the compensation calculation follow the exact wording of your agreement?

4. Maximum cap

Has the employer applied the correct maximum number of weeks?

5. Notice

Are you working your notice or receiving payment in lieu?

6. Annual leave

Is your unused annual leave balance correct?

7. Leave anniversary

Has the applicable holiday-pay calculation been included?

8. Other payments

Are there unpaid wages, allowances, expenses, bonuses or other contractual amounts?

9. PAYE

Has the correct tax treatment been applied?

10. KiwiSaver

Has KiwiSaver been deducted only from amounts that are subject to it?

These checks can help you identify discrepancies before signing a final settlement.

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Example: Calculate a NZ Redundancy Package

Let’s look at a simple example.

Suppose an employee has:

• Annual salary: $85,000
• Completed service: 3 years
• Redundancy: 2 weeks per completed year
• Redundancy cap: 16 weeks
• Notice: 4 weeks
• Notice paid in lieu: Yes
• Unused annual leave: 3.2 weeks
• Other earnings: $0

Step 1 — Weekly salary

$85,000 ÷ 52 = $1,634.62

Step 2 — Redundancy weeks

3 × 2 = 6 weeks

Step 3 — Redundancy compensation

6 × $1,634.62 = $9,807.72

Step 4 — Notice pay

4 × $1,634.62 = $6,538.48

Step 5 — Annual leave

3.2 × $1,634.62 = $5,230.78

Estimated gross components

$9,807.72 + $6,538.48 + $5,230.78

= $21,576.98

So the employee’s estimated gross final payment would be approximately:

$21,577

The actual net amount will depend on the applicable PAYE calculation, KiwiSaver, tax code and any other deductions.

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Why Use a Redundancy Calculator Instead of Doing It Manually?

A redundancy package can contain several different payments, making manual calculations surprisingly easy to get wrong.

A dedicated NZ redundancy calculator lets you bring the components together in one place.

It can help you answer questions such as:

• How much redundancy pay might I receive?
• How much is my notice worth?
• What is my unused annual leave worth?
• What could my gross final payment be?
• How much PAYE could be deducted?
• How much KiwiSaver could be deducted?
• Approximately how much could I receive in my bank account?
• How does my redundancy package change if I have 3, 5 or 10 years of service?
• What happens if my employer pays notice in lieu?
• How does a redundancy cap affect my payment?

This makes the calculator particularly useful when comparing a proposed redundancy package with your own employment agreement.

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What the NZ Redundancy & Final Pay Calculator Does Not Include

The calculator is designed to provide a practical estimate, but it cannot reproduce every employer payroll calculation.

It does not fully account for every possible circumstance, including:

• individual tax-code variations
• student loan deductions
• child-support deductions
• unusual remuneration arrangements
• complex bonus arrangements
• commissions
• overtime
• allowances
• different holiday-pay calculation scenarios
• negotiated settlement agreements
• employer-specific payroll rules
• legal disputes about redundancy
• special employment agreements

Your actual final payslip should therefore be treated as the authoritative payroll calculation unless you have reason to challenge it.

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Redundancy vs Final Pay: What’s the Difference?

These terms are often confused.

Redundancy compensation

A payment provided under an applicable employment agreement, collective agreement, policy or negotiation because the employee’s position is being made redundant.

Final pay

The complete amount owed when employment ends.

Final pay can include:

Final wages + notice + holiday pay + redundancy compensation + other amounts owing

So an employee can have a final pay even if they receive no redundancy compensation.

That distinction is extremely important in New Zealand.

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Frequently Asked Questions

Do I automatically get redundancy pay in New Zealand?

No. New Zealand does not generally provide a statutory redundancy payment. Whether you receive redundancy compensation depends on the applicable employment agreement, collective agreement, workplace arrangements or negotiations.

How is redundancy pay calculated in NZ?

If your employment agreement provides redundancy compensation, the calculation depends on the wording of that agreement. A common formula is a specified number of weeks’ pay for each completed year of service, often subject to a maximum number of weeks.

Is redundancy compensation taxable in New Zealand?

Yes. Inland Revenue states that redundancy payments are taxable income.

Does KiwiSaver apply to redundancy pay?

KiwiSaver contributions are not deducted from a redundancy payment.

Is ACC deducted from redundancy compensation?

Inland Revenue states that redundancy payments are exempt from the ACC earners’ levy. Other applicable components of a final payment can have different treatment.

What happens to unused annual leave when I am made redundant?

Unused annual holidays must generally be included in your final pay. The calculation can involve ordinary weekly pay and average weekly earnings, depending on the circumstances.

What if I am paid instead of working my notice?

If your employer pays you in lieu of notice, the notice component can form part of your final lump-sum payment. If you work the notice period, you normally continue receiving your wages during that period.

Does a redundancy payment include annual leave?

Not necessarily. Redundancy compensation and annual holiday pay are separate components. Your final pay can contain both.

Does length of service affect redundancy pay?

It can. If your employment agreement calculates compensation by completed years of service, longer service generally produces a larger entitlement, subject to any cap.

Do partial years count toward redundancy compensation?

That depends on your agreement. If the clause specifically says completed years, a partial year normally does not count as a full year for that particular calculation.

Can I negotiate a redundancy payment?

Yes. Employers and employees can negotiate redundancy arrangements, although the outcome depends on the circumstances and applicable employment terms.

Why is my actual final payment different from the calculator?

The calculator provides an estimate. Your employer’s payroll calculation may use different holiday-pay earnings, tax-code information, student-loan deductions, additional payments or other circumstances.

When should final pay be paid?

Employment New Zealand says final pay must be paid on or before the payday for the final pay period, which can be after the employee’s last working day.

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What to Do If You Think Your Final Pay Is Wrong

Start by comparing your final payslip with your:

1. Employment agreement
2. Redundancy letter or proposal
3. Notice provisions
4. Leave balance
5. Salary records
6. Redundancy calculation
7. PAYE deductions
8. KiwiSaver deductions
9. Other agreed payments

If something does not appear correct, ask your employer or payroll team for a written breakdown.

For employment-rights information, Employment New Zealand provides guidance and assistance, including a contact number of 0800 20 90 20.

For tax-specific questions, Inland Revenue is the appropriate source.

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Final Thoughts

Being made redundant can be financially stressful, and the headline redundancy amount does not always tell you how much money you will actually receive.

The New Zealand Redundancy & Final Pay Calculator brings the major components together so you can estimate your potential final payment before making financial decisions.

The most important thing to remember is that redundancy compensation is not automatically guaranteed in New Zealand. Your employment agreement is often the starting point for determining whether compensation is payable and how it should be calculated.

Your final payment can also include notice, unused annual holidays and other amounts you are owed, even when no redundancy compensation applies.

Use the calculator to estimate your gross redundancy package, deductions and potential net final payment, then compare the result with your employment agreement and actual payslip.

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2026/27 NZ Redundancy & Final Pay Calculation Reference

This calculator and article are designed around the 2026/27 New Zealand tax year, running from 1 April 2026 to 31 March 2027.

Key current figures include:

• Personal income-tax rates from 10.5% to 39% depending on taxable income.
• ACC earners’ levy of 1.75% for applicable earnings, up to the relevant $156,641 maximum for 2026/27.
• KiwiSaver employee contribution rates of 3.5%, 4%, 6%, 8% or 10%, subject to the applicable rules.
• Student-loan annual repayment threshold of $24,128 for the 2027 tax year.

Because tax, employment and holiday-pay rules can change, always verify the calculation against current official guidance and your own employment agreement.

Official NZ resources

Employment New Zealand — Redundancy guidance

Employment New Zealand — Final pay

Inland Revenue — Redundancy and income tax

Inland Revenue — Redundancy and KiwiSaver

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Disclaimer

Estimates only, in NZD. This calculator is intended for general information and planning purposes. It is not a payslip, tax return, employment-law determination or substitute for professional advice. Actual redundancy compensation depends on your employment agreement and circumstances. Actual holiday pay, PAYE, KiwiSaver, ACC, student-loan and other deductions may differ from the calculator’s estimate. Always check your final calculation with your employer, payroll provider, Inland Revenue or a qualified adviser where appropriate.

Important correction for your calculator: I would change the explanation’s ACC earners’ levy from 1.67% to 1.75% for 2026/27 before publishing. Inland Revenue’s current 2026/27 lump-sum guidance confirms the 1.75% rate, and redundancy payments are specifically excluded from the ACC earners’ levy.