How much redundancy pay am I entitled to UK?

Statutory minimum: half a week's pay for each year aged under 22, one week's pay for each year aged 22-40, 1.5 weeks' pay for each year aged 41+. Weekly pay capped at £700 (2024/25). Maximum 20 years count. Many employers pay more than statutory minimum.

Do I qualify for redundancy pay UK?

You need 2+ years continuous employment with the same employer. You must be an employee (not self-employed/contractor). The redundancy must be genuine — job no longer exists. Refused suitable alternative employment = may lose entitlement.

How much notice for redundancy UK?

Statutory minimum: 1 week (1 month-2 years service), 1 week per year (2-12 years), 12 weeks maximum (12+ years). Check your contract — may be more. Can be paid in lieu of notice (PILON). Collective redundancy has additional consultation requirements.

Is redundancy pay taxable UK?

First £30,000 of redundancy pay is tax-free. This includes statutory and enhanced redundancy. Above £30,000 is taxed as income. Notice pay (worked or PILON) is fully taxable. Holiday pay is fully taxable.

Redundancy Pay and Rights UK — Complete Guide | PocketWise

Being made redundant is stressful, but knowing your rights helps you navigate it better — and ensure you get everything you’re owed.

For the wider cluster covering redundancy, statutory pay, leave rights, contract protections, and dispute routes, use the main Employment Rights hub.

Redundancy Basics

What Is Redundancy?

Genuine Redundancy	Not Redundancy
Job no longer exists	Don’t like your performance
Business closing	Want someone cheaper
Workplace relocating	Personal dispute
Restructuring eliminates role	Role still exists

Who Qualifies

Requirement	Details
Employment status	Must be employee
Length of service	2+ years continuous
Genuine redundancy	Not dismissal in disguise
Not refused alternative	Suitable role offered

Who Doesn’t Qualify

Situation	Statutory Redundancy Pay?
Under 2 years’ continuous service	No
Turned down a suitable alternative role	May lose entitlement
Fixed-term contract ended (depending on terms)	Not always
Dismissed for misconduct	No
Self-employed / contractor	No — not an employee

Statutory Redundancy Pay

Calculation

Age During Service	Pay Per Year
Under 22	Half week’s pay
22-40	One week’s pay
41+	1.5 weeks’ pay

Caps and Limits

Limit	Amount (2024/25)
Weekly pay cap	£700
Maximum years	20
Maximum statutory payout	£21,000

Calculator Examples

Scenario	Calculation
Age 35, 5 years service, £600/week	5 × £600 = £3,000
Age 45, 10 years service, £800/week	10 × £700 (capped) × 1.5 = £10,500
Age 25, 3 years service, £400/week	3 × £400 = £1,200

Work Out Your Pay

Step	Action
1	Count complete years of service
2	Note your age during each year
3	Calculate weekly pay (capped at £700)
4	Apply multipliers for each year
5	Add up total

Enhanced Redundancy

Beyond Statutory

Many Employers Offer	Details
More than statutory	Check policy
Weeks per year	Often 1-4 weeks per year
No weekly cap	Full salary used
More years count	Beyond 20

Negotiating More

Approach	When Possible
Check company policy	May be set
Compare to colleagues	Consistency
Consider leverage	Skills, knowledge
Seek legal advice	If amounts significant

Notice Periods

Statutory Minimum

Service Length	Notice
1 month - 2 years	1 week
2-12 years	1 week per year
12+ years	12 weeks

Contractual Notice

Check	Your Contract May Say
Longer notice	More than statutory
Same either way	Employee or employer
Garden leave	Paid, don’t work
PILON	Pay instead of notice

Pay in Lieu of Notice (PILON)

Feature	Details
What it is	Payment instead of working notice
Tax treatment	Fully taxable
Holiday accrual	Check if continues
Benefits	Usually end

Tax on Redundancy

What’s Tax-Free

Tax-Free (Up to £30,000)	Taxable
Statutory redundancy pay	Notice pay (worked)
Enhanced redundancy pay	PILON
Ex-gratia payments	Holiday pay
	Bonus owed

How It Works

Example	Breakdown
Redundancy: £25,000	Tax-free
Notice (PILON): £5,000	Taxed normally
Holiday owed: £2,000	Taxed normally
Total: £32,000	Tax on £7,000

Example: £45,000 Package

Component	Amount	Tax Status
Statutory redundancy	£8,000	Tax-free
Enhanced redundancy	£30,000	£22,000 tax-free, £8,000 taxed
Holiday pay	£2,000	Fully taxed
Notice pay (PILON)	£5,000	Fully taxed
Total taxable in package		£15,000

If Over £30,000

Amount Over	Treatment
Exceeds £30,000	Taxed as income
Added to income	That tax year
May push into higher band	Plan ahead

The Redundancy Process

Consultation Requirements

Number at Risk	Consultation Period
1-19 employees	No minimum (reasonable)
20-99 employees	30 days
100+ employees	45 days

What Employer Must Do

Step	Requirement
Selection criteria	Fair and objective
Consultation	Meaningful
Consider alternatives	Other roles
Right to appeal	Internal process
Written reasons	If requested

Your Rights During Consultation

Right	Details
Be consulted	Before final decision
Reasonable time off	To find new job
Challenge selection	If unfair
Consider alternatives	Suitable roles

Alternative Employment

Suitable Alternative

If Offered	Your Rights
Similar role	Must consider
Lower status	Can reasonably refuse
Different location	Depends on contract
Trial period	4 weeks to try

Refusing Alternative

Unreasonable Refusal	Lose redundancy pay
Reasonable Refusal	Keep redundancy pay
Trial period	4 weeks, then decide

If It Goes Wrong

Unfair Selection

May Be Unfair	Details
Last in, first out only	Generally unlawful
Discriminatory criteria	Protected characteristics
Union membership	Automatically unfair
Whistleblowing	Automatically unfair
Pregnancy/maternity	Automatically unfair

What to Do

Step	Action
1	Raise concerns internally
2	Appeal using process
3	Get advice (ACAS)
4	Consider tribunal

Employment Tribunal

Time Limit	3 months less 1 day
ACAS first	Early conciliation
Claims	Unfair dismissal, discrimination
Awards	Varies significantly

What You’re Owed

Final Pay Should Include

Item	Check
Redundancy pay	Statutory or enhanced
Notice pay	Worked or PILON
Outstanding salary	To leaving date
Holiday owed	Accrued, untaken
Bonus	If contractually due
Benefits	Check handover

Documents to Get

Document	Why
P45	For new employer/HMRC
Reference	For job applications
Pension details	Transfer or leave
Written calculation	How pay computed

After Redundancy

Immediate Steps

Action	Timeline
Check final pay	This week
Claim benefits	If needed, straightaway
Update CV	This week
Start job search	Immediately
Check pension	Transfer or leave

Benefits

If Unemployed	May Be Entitled
Universal Credit	Means-tested
New Style JSA	Contribution-based
Housing help	Council Tax, rent
Council Tax reduction	Apply locally

Summary: Redundancy Checklist

Know Your Rights

Check	Done
Length of service	☐
Statutory redundancy due	☐
Company policy/enhanced	☐
Notice period (contract)	☐
Consultation rights	☐

During Process

Action	Done
Attend consultation meetings	☐
Ask for written reasons	☐
Consider alternatives offered	☐
Take time off to job search	☐
Appeal if unfair	☐

Before Leaving

Confirm	Done
Final pay calculation	☐
Holiday owed	☐
P45 arranged	☐
Reference agreed	☐
Pension details	☐

Key Contacts

Organisation	For
ACAS	0300 123 1100
Citizens Advice	Free guidance
Gov.uk calculator	Redundancy pay
Jobcentre Plus	Benefits

Redundancy is difficult, but it can also be a new beginning. Make sure you get everything you’re entitled to, take time to process, and then focus on what’s next. Many people look back on redundancy as a positive turning point.

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