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JoanM(Newbie)Newbie
30 Oct 2025

Hi,

I am being made genuinely redundant after 18 years of service with a State government agency. During this period I took two years of maternity leave (of which only 12 weeks was paid each year), I worked part-time for 2 years, and also had two years of leave without pay, but I was continuously employed for the whole 18 years.

The calculation of the tax-free part of the redundancy payout is based on 'complete' years of service. Is this the full 18 years or do I need to deduct the period of unpaid leave and also pro-rata the years when I was working part-time?

Any help on answering this would be most appreciated.

199 views
1 replies
199 views
1 replies

All replies

PayrollDeanne(Taxicorn)Taxicorn
31 Oct 2025

Hiya @JoanM 👋


The full definition of "completed years of service" is actually based on a Fair Work definition of "continuous service" 🤓


"Continuous service" is an unbroken period that can include periods of leave. It is explained in detail in the Fair Work Ombudsman guidance. 😉 It doesn't include unpaid parental leave, they have an example that illustrates that.


Don't be confused between counting the years of service and the pro-rata ACCRUAL OF LEAVE. They are different things. Part-time for 2 years is 2 years of service.


Deanne

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Do you need to pro-rata years of service to calculate tax free threshold for genuine redundancy? | ATO Community