Salary and income data is based on ONS and other official UK statistical sources. Figures are averages and may not reflect your individual circumstances.
Contents
Understanding redundancy calculations helps you know what you’re entitled to and negotiate effectively.
For the wider cluster covering redundancy, statutory pay, leave rights, contract protections, and dispute routes, use the main Employment Rights hub.
Statutory Redundancy Pay
Calculation Formula
Your Age
Per Year of Service
Under 22
0.5 week’s pay
22-40
1 week’s pay
41+
1.5 week’s pay
Limits (2026/27)
Limit
Amount
Weekly pay cap
£751
Maximum years
20
Maximum payment
£22,530
Qualifying Criteria
Requirement
Details
Employment
2+ years continuous
Genuine redundancy
Role not needed
Dismissed
Not resigned
Calculate Your Payment
Step 1: Count Service
Calculation
Details
Start date
When you began
End date
Last day of employment
Complete years
Only whole years count
Maximum
20 years
Step 2: Calculate Weekly Pay
If You Earn
Weekly
£25,000/year
£481
£30,000/year
£577
£39,052+/year
£751 (capped)
£40,000/year
£751 (capped)
£50,000/year
£751 (capped)
Step 3: Apply Age Multipliers
Example: 15 Years Service
Age During Years
Ages 25-40 (15 years)
15 × 1 = 15 weeks
Ages 45-60 (15 years)
15 × 1.5 = 22.5 weeks
Mixed ages
Calculate each period
Worked Examples
Example 1: Simple Calculation
Factor
Value
Age now
35
Years of service
8 (all aged 27-35)
Weekly pay
£600
Rate
1 week per year
Calculation
8 × £600 = £4,800
Example 2: Multiple Age Bands
Factor
Value
Age now
45
Years service
15
Years aged 30-41
11 years @ 1 week
Years aged 41-45
4 years @ 1.5 weeks
Weekly pay
£751 (capped)
Calculation
Weeks
11 × 1
11
4 × 1.5
6
Total
17 weeks
At £751/week
£12,767
Example 3: Maximum Payment
Factor
Maximum
20 years all aged 41+
20 × 1.5 = 30 weeks
At cap
£751
Maximum
£22,530
Quick Reference Tables
By Years of Service (Age 25-40 throughout)
Years
Weeks
At £500/wk
At £751 cap
2
2
£1,000
£1,502
5
5
£2,500
£3,755
10
10
£5,000
£7,510
15
15
£7,500
£11,265
20
20
£10,000
£15,020
By Years of Service (Age 41+ throughout)
Years
Weeks
At £500/wk
At £751 cap
2
3
£1,500
£2,253
5
7.5
£3,750
£5,632.50
10
15
£7,500
£11,265
15
22.5
£11,250
£16,897.50
20
30
£15,000
£22,530
What Breaks Continuous Service
Continuity of service can be broken, which means you may not qualify for statutory redundancy pay:
Break Cause
Notes
Gap between two employments
Even 1 day breaks continuity in most cases
Dismissal and re-engagement
Usually breaks continuity (exceptions apply)
Transfer to a different legal employer
Breaks continuity unless TUPE regulations apply
If continuity was broken at some point during your time at the organisation, your qualifying period restarts from that point.
Enhanced Redundancy
What Employers May Offer
Enhancement
Example
Higher multiplier
2 weeks per year
No weekly cap
Actual salary
Higher caps
£1,000/week
Additional terms
Ex gratia payments
Typical Enhanced Packages
Type
Common Terms
Public sector
2-3 weeks per year
Corporate
True weekly pay
Senior roles
3+ months base
Negotiated
Varies widely
Example: Enhanced vs Statutory
Factor
Statutory
Enhanced
Years service
10
10
Age
35
35
Weekly pay (actual)
£1,000
£1,000
Rate
1 week/year
2 weeks/year
Cap applied
£751
None
Payment
£7,510
£20,000
Other Payments Due
Notice Pay
Your Service
Statutory Notice
1 month - 2 years
1 week
2-12 years
1 week per year
12+ years
12 weeks maximum
Notice Pay Options
Type
Treatment
Work notice
Normal pay (taxed)
Garden leave
Normal pay (taxed)
PILON
Taxed as earnings
Included in package
Still taxed
Other Entitlements
Payment
Status
Outstanding salary
Taxable
Accrued holiday
Taxable
Bonus (if due)
Taxable
Commission owed
Taxable
Tax Treatment
Tax-Free Elements
Tax-Free
Up To
Redundancy pay
£30,000
Includes
Statutory + enhanced
Termination payment
First £30k
Taxable Elements
Always Taxable
Items
Notice pay
Worked or PILON
Holiday pay
Owed
Salary
Outstanding
Bonus
If contracted
Example Tax Calculation
Element
Amount
Tax Status
Statutory redundancy
£7,000
Tax-free (within £30k)
Enhanced redundancy
£15,000
Tax-free (within £30k)
PILON (8 weeks)
£8,000
Taxable
Holiday (10 days)
£2,000
Taxable
Total package
£32,000
Tax-free portion
£22,000
Taxable portion
£10,000
Over £30,000
Excess
Treatment
Amount over £30k
Taxed at your rate
Example £40k payment
£10k taxable
At 40% tax
£4,000 tax bill
What If Your Employer Refuses to Pay?
If your employer refuses to pay statutory redundancy pay:
Step
Action
1
Raise a written grievance with HR or the employer
2
Apply to an Employment Tribunal — you have 6 months from dismissal specifically for redundancy pay claims (3 months for most other tribunal claims)
3
If employer is insolvent, apply to the National Insurance Fund via the Insolvency Service — the government can pay statutory redundancy directly
The debt to the National Insurance Fund only covers statutory minimum amounts, not any enhanced redundancy offered by the employer.