Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Using the previous example calculation, the employee would get:

Time period:

No. of years:

Rate per year

Amount to be paid:

4 weeks for the first year employed 2 weeks for any subsequent year

1

$4000.00

$4000

19

$2000.00

$38000

20

$42000

Capped redundancy Compensation

A variation of redundancy compensation that may be seen is where the payment is capped in the agreement. This means a limit is set on the time the redundancy compensation payment covers.

Example 3:

• 4 weeks for the first year employed • 2 weeks for any subsequent year (capped at eight weeks) • Paid at the employee's ordinary rate of pay So, the employee can get 12 weeks of compensation that covers an employee who has been employed up to a maximum of five years (even if they have been employed for 20 years).

© New Zealand Payroll Practitioners Association, Mar 2026, Ver 9

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