Redundancy Calculator

How statutory redundancy pay is calculated

You get statutory redundancy pay if you're an employee with 2 or more years' continuous service when you're made redundant. The amount is a multiple of your weekly pay for each full year worked, and the multiplier depends on your age during that particular year — 0.5 week's pay for each full year you were under 22, 1 week's pay for each full year aged 22-40, and 1.5 week's pay for each full year aged 41 or over.

This is worked out year by year, counting backward from your leaving date — so if you're 45 now with 10 years' service, only your most recent years (ages 41-45) earn the higher 1.5x rate; the earlier years (ages 36-40) earn 1x, even though you're 45 today. This calculator does that year-by-year breakdown for you.

The 20-year cap and the weekly pay cap

Length of service is capped at 20 years — if you've worked somewhere for 25 years, only the most recent 20 years count toward your redundancy pay. Your weekly pay is also capped: for redundancies from 6 April 2026, the maximum weekly pay used in the calculation is £751, even if you actually earn more. Combined, these two caps set the statutory maximum: 20 years x 1.5 weeks x £751 = £22,530.

Your weekly pay itself is the average you earned per week over the 12 weeks before you received your redundancy notice — not your annual salary divided by 52, which can matter if your hours or overtime varied.

Is redundancy pay taxed?

Statutory redundancy pay is always completely tax-free — at the current caps it can never reach the £30,000 tax-free threshold on its own. If your employer also gives you an enhanced or contractual redundancy payment on top, the two amounts are added together, and the combined total is tax-free up to £30,000. Anything above £30,000 is taxed as income (though National Insurance still doesn't apply to redundancy pay itself, even above £30,000).

Who is not entitled to statutory redundancy pay

You won't get statutory redundancy pay if your employer offers to keep you on, or offers you suitable alternative work which you turn down without good reason. Being dismissed for misconduct is not redundancy and doesn't attract redundancy pay either. Certain categories are excluded entirely, including former registered dock workers, share fishermen, Crown servants, armed forces and police, apprentices who aren't employees at the end of training, and domestic servants who are immediate family of the employer.

Short-term lay-offs and how to claim

If you've been laid off without pay (or on less than half a week's pay) for more than 4 consecutive weeks, or more than 6 non-consecutive weeks within a 13-week period, you can claim statutory redundancy pay even without a formal redundancy notice — you write to your employer within 4 weeks of the last non-working day in that period. You have 6 months from your job ending to apply for statutory redundancy pay.