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.