If you have been made redundant, you may be entitled to statutory redundancy pay. The amount depends on how long you have worked for your employer, how old you were during each year of service, and your weekly pay — which is capped at £643 in 2026/27.
Use this guide to calculate exactly what you are owed.
Key Figures for 2026/27
| Limit | Amount |
|---|---|
| Weekly pay cap | £643 |
| Maximum service counted | 20 years |
| Minimum service to qualify | 2 years |
| Maximum statutory payout | £19,290 |
| Tax-free limit | £30,000 |
How Statutory Redundancy Pay Is Calculated
The formula uses three factors:
- Age during each year of service
- Length of service (years worked with this employer)
- Weekly pay (capped at £643)
The Multiplier by Age
| Age During Year of Service | Weeks’ Pay Per Year |
|---|---|
| Under 22 | 0.5 weeks |
| 22 to 40 | 1 week |
| 41 or over | 1.5 weeks |
Years are counted backwards from the date of redundancy, and the age you were during each year determines the rate.
The Weekly Pay Cap
If you earn more than £643/week (£33,436/year gross), your redundancy pay is calculated on £643 — not your actual earnings.
If you earn less than £643/week gross, your actual weekly pay is used.
Redundancy Pay Calculator
To work out your entitlement:
Step 1: Find your weekly pay. Divide your gross annual salary by 52. If this is above £643, use £643.
Step 2: List your complete years of service, and how old you were during each year.
Step 3: Apply the multiplier to each year and add them up.
Step 4: Multiply the total weeks by your capped weekly pay.
Step-by-Step Example 1
Employee: Age 35, 4 years’ service, annual salary £28,000
Weekly pay = £28,000 ÷ 52 = £538.46 (below cap, so use actual)
| Year | Age During Year | Multiplier | Weeks |
|---|---|---|---|
| 4th (most recent) | 35 | 1.0 | 1.0 |
| 3rd | 34 | 1.0 | 1.0 |
| 2nd | 33 | 1.0 | 1.0 |
| 1st | 32 | 1.0 | 1.0 |
| Total | 4.0 weeks |
Statutory redundancy pay = 4 weeks × £538.46 = £2,153.84
Step-by-Step Example 2
Employee: Age 48, 12 years’ service, annual salary £55,000
Weekly pay = £55,000 ÷ 52 = £1,057.69 → capped at £643
| Years | Age Range | Multiplier | Weeks |
|---|---|---|---|
| Years 1–6 (ages 37–42) | Partly under and over 41 | Mix of 1.0 and 1.5 | See below |
Working backwards from age 48:
| Year (Backwards) | Age | Multiplier | Weeks |
|---|---|---|---|
| 1 | 48 | 1.5 | 1.5 |
| 2 | 47 | 1.5 | 1.5 |
| 3 | 46 | 1.5 | 1.5 |
| 4 | 45 | 1.5 | 1.5 |
| 5 | 44 | 1.5 | 1.5 |
| 6 | 43 | 1.5 | 1.5 |
| 7 | 42 | 1.5 | 1.5 |
| 8 | 41 | 1.5 | 1.5 |
| 9 | 40 | 1.0 | 1.0 |
| 10 | 39 | 1.0 | 1.0 |
| 11 | 38 | 1.0 | 1.0 |
| 12 | 37 | 1.0 | 1.0 |
| Total | 15.0 weeks |
Statutory redundancy pay = 15 weeks × £643 = £9,645
Step-by-Step Example 3 — Long Service, High Earner at Cap
Employee: Age 54, 20 years’ service (maximum counted), annual salary £70,000
Weekly pay capped at £643
All 20 years worked aged 41 or above → 1.5 × 20 = 30 weeks
Statutory redundancy pay = 30 weeks × £643 = £19,290 (the maximum)
Quick Reference — What You Might Be Owed
| Years Served | All Under 22 | All 22–40 | All 41+ |
|---|---|---|---|
| 2 | 1 week | 2 weeks | 3 weeks |
| 5 | 2.5 weeks | 5 weeks | 7.5 weeks |
| 10 | 5 weeks | 10 weeks | 15 weeks |
| 15 | 7.5 weeks | 15 weeks | 22.5 weeks |
| 20 (max) | 10 weeks | 20 weeks | 30 weeks |
These are at the applicable weekly pay (up to the £643 cap).
Minimum Service Requirement
You need 2 complete years of continuous service to receive statutory redundancy pay. Part years do not count — if you have worked 1 year and 11 months, you receive nothing under the statutory scheme.
What Breaks Continuity
Your continuous service may be broken by:
- A gap between two employments (even 1 day, in most cases)
- Dismissal and re-engagement (usually — with exceptions)
- Transfer to a different legal employer (unless TUPE applies)
Tax on Redundancy Pay
| Element | Tax Treatment |
|---|---|
| Statutory redundancy pay | Tax-free (under £30,000 threshold) |
| Enhanced redundancy pay (combined with statutory, up to £30,000) | Tax-free |
| Redundancy pay above £30,000 combined | Taxable as income |
| Notice pay (pay in lieu of notice) | Always taxable |
| Holiday pay owed | Always taxable |
Key point: Redundancy pay and notice pay are treated differently for tax. Redundancy payments get the £30,000 exemption. Notice pay — whether worked or paid in lieu — is always taxable regardless of how it is labelled.
Statutory vs Enhanced Redundancy Pay
| Type | Amount | Who Sets It |
|---|---|---|
| Statutory | Minimum calculated by law | Government |
| Enhanced | Above statutory | Employer (contractual or discretionary) |
If your employer offers enhanced redundancy, it may be:
- A higher weekly rate (e.g., actual salary, not capped at £643)
- More than 1 week per year for all ages
- An ex-gratia additional sum
- Several weeks’ notice pay as a “package”
Check your employment contract and any redundancy policy. If you have been employed for over 2 years, you are entitled to statutory redundancy pay as a minimum — it cannot be taken away.
What if Your Employer Refuses to Pay?
If your employer refuses to pay statutory redundancy:
- Raise a grievance in writing
- Apply to an Employment Tribunal — you have 6 months from dismissal (3 months for most claims — but 6 months specifically for redundancy pay claims)
- Apply to the National Insurance Fund — if your employer is insolvent, the government can pay statutory redundancy directly via the Insolvency Service
Other Redundancy Entitlements
Redundancy pay is just one part of what you may be owed when made redundant:
| Entitlement | What It Is |
|---|---|
| Notice pay | Statutory minimum: 1 week per year of service (up to 12 weeks), or contractual notice if longer |
| Holiday pay | All accrued but untaken holiday must be paid |
| Outstanding wages | Any unpaid salary to date |
| Company benefits | Continued until last day of employment |
| Reference | You are entitled to request a reference |
What to Do After Redundancy
Financial steps to take immediately:
- Claim Jobseeker’s Allowance or Universal Credit if not moving straight into new work
- Check your payslip — ensure you have been paid the correct redundancy, notice, and holiday pay
- Pension notification — check what happens to pension contributions and any employer match
- Tax refund — if made redundant mid-year, you may be owed a tax refund
- Update CV and LinkedIn — the sooner you start, the better