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Voluntary Retirement Compensation Calculator

Work out voluntary retirement compensation instantly with clear inputs, formula shown and shareable results.

About Voluntary Retirement Compensation Calculator

Voluntary retirement compensation is conventionally the lower of three months' salary for each completed year of service and the salary that would have been earned to superannuation. Only part of it is tax-exempt, with the remainder taxed as salary income.

Formulas

Basis A

Three months' pay per completed year = Monthly salary x 3 x Completed years

Basis B

Salary to superannuation = Monthly salary x Months remaining

Compensation

Compensation = min(Basis A, Basis B)

Worked example

With the default values below, Voluntary Retirement Compensation Calculator returns VRS compensation payable of $4,590,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Last drawn monthly salary
85,000
Completed years of service
22
Months remaining to superannuation
54
Exemption cap on VRS compensation
500,000

Results

VRS compensation payable
$4,590,000.00
Three months' pay per completed year
$5,610,000.00
Salary for the remaining service period
$4,590,000.00
Tax-exempt portion
$500,000.00

Step by step

  1. 1Values used
  2. 2Basis A
  3. 3Basis B
  4. 4Compensation
  5. 5VRS compensation payable= 4,590,000.00
  6. 6Three months' pay per completed year= 5,610,000.00
  7. 7Salary for the remaining service period= 4,590,000.00
  8. 8Tax-exempt portion= 500,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Indicative estimate. VRS formulas, exemption limits and conditions are scheme- and jurisdiction-specific. Not tax or legal advice.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative estimate. VRS formulas, exemption limits and conditions are scheme- and jurisdiction-specific. Not tax or legal advice.

Frequently Asked Questions

Why take the lower of the two?

Because the scheme is meant to compensate for foregone service, not to exceed what the employee would have earned by staying.

Is the exemption available more than once?

Typically the exemption can be claimed only once in a lifetime, and only where the scheme meets prescribed conditions.

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