Why use this calculator
If you are being made redundant, understanding your statutory entitlement helps you ensure you receive the correct payment and evaluate any enhanced redundancy package your employer may offer. This calculator applies the statutory formula based on your age, length of service, and weekly pay to determine your minimum legal entitlement. Many employers offer enhanced redundancy packages that exceed the statutory minimum.
How to use it
Enter your current weekly salary (before tax), total years of continuous service with the employer, and your current age. The calculator applies the statutory formula with age-based multipliers for each year of service and caps weekly pay at the statutory maximum.
The formula
For each year of service (max 20 years): Under 22 = 0.5 weeks' pay per year; Age 22-40 = 1 week's pay per year; Age 41+ = 1.5 weeks' pay per year. Weekly pay is capped at the statutory maximum ($643). The calculation considers your age during each year of service, not just your current age.
Worked examples
Employee aged 45 with 10 years of service earning $1,200/week
Statutory redundancy of approximately $8,360 based on 13 weeks' entitlement at capped rate
Employee aged 30 with 8 years of service earning $500/week
Statutory redundancy of $4,000 based on 8 weeks' entitlement at full weekly rate
When people use it
- Employees verifying their statutory redundancy entitlement
- HR departments calculating redundancy costs for workforce restructuring
- Comparing statutory minimum against enhanced redundancy packages
- Financial planning during a redundancy consultation period
Tips
- You need at least 2 years of continuous service to qualify for statutory redundancy pay
- Many employers offer enhanced redundancy packages that multiply the statutory calculation; always negotiate
- Redundancy pay up to $30,000 is typically tax-free
- If you believe the redundancy is not genuine (e.g., your role is being filled by someone else), you may have an unfair dismissal claim
Questions people ask
- Is redundancy pay taxable?
- Statutory and enhanced redundancy payments up to $30,000 are generally tax-free. Any amount above $30,000 is subject to income tax and potentially National Insurance contributions. Pay in lieu of notice (PILON) is always taxable.
- What if my employer cannot afford to pay redundancy?
- If your employer is insolvent, you can claim statutory redundancy pay from the government's National Insurance Fund. This covers the statutory amount but may not cover any enhanced redundancy terms.
- Can I be made redundant while on maternity leave?
- You can be made redundant while on maternity leave if the redundancy is genuine. However, you have the right to be offered any suitable alternative vacancy in priority over other employees. Selecting someone for redundancy because of pregnancy or maternity leave is automatically unfair.