Why use this calculator
Redundancy payments are calculated by payroll systems and handed over as a single figure on a settlement letter, usually at a point when the recipient has other things on their mind than checking the arithmetic. Errors are common and they run in one direction: an employer that uses your current age for every year of service, forgets that pay above the weekly cap is ignored, or counts partial years, produces a number that looks plausible and is wrong.
This calculator reproduces the statutory formula exactly, including the backwards age banding that most informal calculations get wrong, and shows the year-by-year build-up so you can point at the specific year that has been miscounted. It also separates the statutory floor from any enhancement your employer has offered, which is the figure that is actually negotiable.
How to use it
- Enter your gross weekly pay before tax, using an average of the twelve weeks before you received notice if your hours or earnings vary.
- Enter your complete years of continuous service on the day employment ends, ignoring any part year, and your age on that same day.
- If your employer operates an enhanced redundancy scheme, enter its multiplier, so two for a scheme paying double the statutory calculation.
- Then say whether that enhanced scheme uses your actual weekly pay or the capped statutory figure, because for anyone earning above the cap that single answer can change the payment by thousands of pounds.
What each result means
- Redundancy payment
- The total you should receive, taking the higher of the statutory minimum and any enhanced scheme. Check this against the figure on your settlement letter.
- Another year of service would add
- How much more the redundancy payment would be if you had one more complete year of service and were a year older, on the same weekly pay and scheme. It is useful when the timing of a redundancy is being negotiated.
- Service still needed to qualify
- How much more continuous service you would need before any statutory redundancy pay is due. Two years is the minimum, counted back from the date your employment ends.
- Statutory minimum
- The legal floor your employer cannot go below if you have two years' service. Any offer under this figure is unlawful regardless of what you sign.
- Weeks of pay earned
- Total weeks produced by the age bands across your service, to a maximum of 30. This is the number to check first if the payment looks wrong.
- Weekly pay used
- The weekly figure actually applied. If it is lower than your real pay, the statutory cap has taken effect and the excess is disregarded.
- Tax-free portion
- The part within the £30,000 threshold for genuine termination payments, which is free of income tax and National Insurance.
- Taxable portion
- Anything above £30,000, taxed as employment income through PAYE in the month it is paid, which often triggers an over-deduction you reclaim later.
- Value of the enhancement
- How much your employer is paying above the legal minimum. This is the negotiable part of the package and the part worth pressing on.
The formula
For each complete year of service, counting backwards from your last day and stopping after 20 years: 1.5 weeks' pay for each year you were aged 41 or over, 1 week for each year aged 22 to 40, and 0.5 weeks for each year under 22.
Statutory redundancy pay = capped weekly pay x total weeks earned
An enhanced payment = weeks earned x weekly pay x the employer's multiplier, using either the capped or uncapped weekly figure depending on the scheme rules
How this number is used in practice
The statutory scheme is a floor, not a going rate. Large employers, the public sector and anywhere with a recognised union commonly pay two or three times the statutory calculation, and many drop the weekly cap entirely, which for a higher earner is worth far more than the multiplier.
Those terms may be contractual, set out in a collective agreement, or simply established by custom and practice through repeated use. Ask directly what the scheme is, ask whether it uses capped or actual pay, and ask what was paid in the last round of redundancies, because a consistent past practice is itself an argument.
Two rules regularly cost people money. The first is that your entitlement depends on your age during each year of service, counted backwards from your last day, not on your age now. Someone who turns 41 shortly before redundancy earns the higher rate for only the most recent year, while a colleague of the same age and service who turned 41 a decade earlier earns it for ten.
The second is the effect of a delayed termination date: reaching another complete year of service, or another birthday that crosses an age band, can be worth over a thousand pounds, and where the date is flexible it is a legitimate thing to raise during consultation.
If the employer becomes insolvent, the statutory payment can be claimed from the Redundancy Payments Service, funded through the National Insurance Fund. That route pays the statutory calculation using the capped weekly figure and nothing more, so the enhanced element of a contractual scheme ranks as an ordinary unsecured debt in the insolvency and is usually lost. Claims are made online once an insolvency practitioner has issued a case reference.
Worked examples
A 48-year-old earning £700 a week with 12 years' service
15.5 weeks earned, giving statutory redundancy pay of £10,850, all of it tax free
A 62-year-old earning £1,500 a week with 25 years' service
The calculation reaches 30 weeks and is capped at the statutory maximum of £22,530 despite earnings of £1,500 a week
The same 62-year-old under a scheme paying double and ignoring the weekly cap
30 weeks at £1,500 doubled gives £90,000, of which £30,000 is tax free and £60,000 is taxed as income
When people use it
- Checking that the figure on a redundancy settlement letter is correct before signing
- Comparing an enhanced offer against the statutory floor to see what is genuinely being added
- Employers costing a restructure across a workforce before consultation begins
- Planning finances during a consultation period when income is about to stop
- Deciding whether to volunteer for redundancy where a scheme is unusually generous
Tips
- You need two years of continuous service to qualify. Service with an employer taken over under TUPE normally carries across, so count from the original start date.
- Only complete years count, so an employment ending a few weeks before an anniversary loses a whole year's entitlement. Ask whether the termination date can move.
- Check your age during each year of service, not just today. Years worked from 41 onwards are worth half as much again.
- Redundancy pay up to £30,000 is tax free, but pay in lieu of notice and holiday pay are taxable in full and do not share that allowance.
- Ask what the employer paid in previous redundancy rounds. An established custom and practice can be argued as a contractual entitlement.
- If the redundancy is not genuine, for example your role is quietly refilled, you may also have an unfair dismissal claim worth more than the payment.
What it assumes, and where it stops being accurate
- Uses the limits in force from 6 April 2026. Redundancies taking effect before that date use the previous year's lower cap and maximum.
- Assumes at least 2 years of continuous service, which is the statutory qualifying period for redundancy pay.
- Only complete years count. Eleven years and eleven months is treated as eleven years by the statutory scheme.
- Excludes notice pay, accrued untaken holiday and any bonus, all of which are paid separately and are taxable in full.
- The £30,000 tax-free threshold covers all genuine termination payments combined, not each payment separately.
- Assumes a genuine redundancy. If the role is being filled by someone else, the dismissal may be unfair regardless of the payment.
Terms used on this page
- Continuous service
- Unbroken employment with one employer or a TUPE successor, which sets the qualifying period.
- A week's pay
- The statutory measure of weekly earnings, capped at £751 for redundancy and basic award purposes.
- Suitable alternative employment
- A comparable role the employer must offer where one exists; unreasonable refusal forfeits redundancy pay.
- TUPE
- Rules transferring employment and accrued service when a business or service contract changes hands.
- Redundancy Payments Service
- The government body paying statutory redundancy when an employer is insolvent.
Questions people ask
- Do I qualify for statutory redundancy pay?
- You need at least two years of continuous service as an employee on the date employment ends, and the dismissal must be by reason of redundancy. Agency workers, the genuinely self-employed and most office holders do not qualify. Refusing a suitable alternative role offered by the employer can also remove the entitlement.
- Why is my pay capped at £751 a week?
- The statutory scheme disregards weekly pay above a limit set each April by the Employment Rights (Increase of Limits) Order, currently £751. That is why the statutory maximum is £22,530, which is thirty weeks at the capped rate. Enhanced employer schemes often ignore the cap and use actual pay.
- Is redundancy pay taxed?
- Genuine redundancy payments are free of income tax and National Insurance up to a combined £30,000 across all termination payments. Anything above that is taxed as employment income. Pay in lieu of notice, accrued holiday pay and bonuses are always taxable in full and do not use the allowance.
- What if my employer goes insolvent?
- You can claim the statutory redundancy payment from the government's Redundancy Payments Service, funded by the National Insurance Fund, once an insolvency practitioner gives you a case reference. That covers the statutory calculation only, so any enhanced contractual element becomes an unsecured debt in the insolvency.
- Can I be made redundant while on maternity leave?
- Yes, if the redundancy is genuine, but you have priority over other employees for any suitable alternative vacancy, and that protection now extends into the period after returning to work. Selecting someone for redundancy because of pregnancy or maternity leave is automatically unfair and also discriminatory.
- Does part-time service count in full?
- Yes for length of service, which counts calendar years regardless of hours. Weekly pay, however, is your actual part-time pay, so a part-time year earns the same number of weeks as a full-time year but each of those weeks is worth less in cash terms.
Use this with
Statutory Redundancy Pay Calculator answers one part of the question. These pick up where it stops: Notice Period Pay Calculator, Unfair Dismissal Compensation Calculator, Constructive Dismissal Compensation Calculator and Employment Tribunal Cost Estimator.
Where these figures come from
Figures and rules on this page follow United Kingdom law.
- The Employment Rights (Increase of Limits) Order 2026. The statutory instrument setting the limits used here, in force 6 April 2026
- GOV.UK: Calculate your statutory redundancy pay. Official redundancy entitlement tool and the age-banded weeks table
- GOV.UK: Redundancy: your rights. Week's pay cap of £751 and the £22,530 maximum
- Acas: Dismissals. Fair procedure, the Acas Code of Practice and the 25% uplift
- Employment Rights Act 1996, Part X and XI. Statutory basis for unfair dismissal, redundancy pay and notice
- GOV.UK: Employment tribunals. Time limits, Acas early conciliation and the hearing process
Statutory Redundancy Pay Calculator produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.