Redundancy is when you end someone’s employment because their position is not needed anymore. A redundancy payment can be made when the person's employment is terminated. You might make a redundancy payment to:
- an employee whose position is no longer needed
- a seasonal worker whose usual seasonal position is no longer needed (this only applies if the employee works for you at a regular time each year and does not work year round).
Redundancy payments are taxed at the lump sum rate. The ACC earners’ levy does not apply to redundancy payments.
Last updated: 02 Jun 2020