UK Redundancy Pay Calculator

The formula counts back through your years of continuous service and applies an age-based multiplier for each year: 0.5 week's pay for each full year worked under age 22, 1 week's pay for each full year worked between age 22 and 40, and 1.5 weeks' pay for each full year worked at age 41 or over. Only your most recent 20 years of service count, and your weekly pay is capped at the statutory maximum regardless of what you actually earn. The total number of weeks is then multiplied by your capped weekly pay.

It is your normal gross weekly pay before tax and other deductions, based on your contracted hours and basic pay. For most salaried employees this is simply annual salary divided by 52. If your hours or pay vary, it is usually averaged over the 12 weeks before your redundancy notice. Regular overtime, commission, and shift allowances can sometimes be included if they are a contractual and regular part of your pay; discretionary bonuses generally are not.

£751 per week, effective for redundancies from 6 April 2026 onwards, up from £719 in the 2025/26 tax year. This cap applies even if your actual weekly pay is higher; the excess simply isn't counted in the statutory formula. Combined with the 20-year service cap and the maximum 1.5 weeks per year multiplier, the highest possible statutory redundancy payment for 2026/27 is £22,530 (20 years x 1.5 weeks x £751).

The first £30,000 of a redundancy payment is free of Income Tax and employee National Insurance. This £30,000 threshold covers your statutory redundancy amount combined with any ex-gratia or enhanced payment your employer adds on top, not each one separately. Any amount above £30,000 is taxed as income at your normal marginal rate. You don't pay employee National Insurance on the excess, though your employer pays Class 1A NI on it, which doesn't affect what lands in your account.

You need at least 2 years of continuous service with the same employer to qualify for statutory redundancy pay at all. If you have less than 2 years, you may still be entitled to your notice period, accrued but unused holiday pay, and any contractual or enhanced redundancy terms your employer has agreed to, but not the statutory minimum.

Furlough does not break continuity of service, so time spent on furlough still counts toward your years of service. Your redundancy pay is based on your normal contractual pay rather than the (potentially reduced) furlough rate you were actually paid, protecting you from a lower payout due to a period on furlough. If you worked part-time for some of your service and full-time for the rest, your weekly pay figure is based on your pay in the period immediately before redundancy, not an average across your whole employment history.

Statutory redundancy pay is the legal minimum set by government formula and applies to every eligible employee regardless of employer. Contractual or enhanced redundancy pay is anything an employer chooses to offer on top, whether through a written policy, employment contract, or a one-off negotiated settlement. Enhanced schemes often pay a flat number of weeks per year of service with no age-banding and no 20-year cap, which usually results in a larger payment than the statutory formula alone, particularly for younger or shorter-service employees.

No. Notice pay (whether you work your notice or receive pay in lieu of notice) is a separate payment taxed as ordinary earnings through PAYE, with Income Tax and National Insurance deducted as usual. It is not part of the statutory redundancy formula and does not benefit from the £30,000 exemption unless HMRC's Post-Employment Notice Pay (PENP) rules specifically require otherwise. This calculator covers only the redundancy payment itself.

No, if you are eligible, statutory redundancy pay is a legal minimum and your employer cannot pay less than the formula produces. If your employer doesn't pay, or disputes your eligibility, length of service or weekly pay, raise it in writing first. For unpaid statutory redundancy pay you then have 6 months less a day from the end of your job to claim at an employment tribunal, after contacting Acas for early conciliation. If your employer is insolvent, apply to the government's Redundancy Payments Service instead.

Usually because of the weekly cap. Statutory redundancy counts at most £751 a week, which is about £39,052 a year, however much you earn. On a £90,000 salary it uses well under half your real weekly pay. The other limits are the 20-year cap on service and the lower half-week rate for years worked under 22. If your employer has an enhanced scheme, it usually pays uncapped weeks on top, so check your contract or staff handbook.

None on the first £30,000 of the redundancy payment, statutory and enhanced together. The rest is taxed as income at your marginal rate, with no employee National Insurance. On a £50,000 salary, a £60,000 package means £30,000 is taxed, costing about £11,946 on PayMetric Labs' own estimate. Notice pay and holiday pay are separate: they are taxed in full, with National Insurance, and don't use the £30,000.

It can. A redundancy payment counts as capital (savings) for means-tested benefits like Universal Credit, and if it pushes your total savings above £6,000 your entitlement may be reduced, or above £16,000 you may not qualify at all until your savings fall back below that threshold. New-style Jobseeker's Allowance, which is based on National Insurance contributions rather than savings, is not affected by a redundancy payment.