Statutory redundancy pay is the legal minimum an employer in Great Britain must pay when it makes you redundant. You earn half a week’s pay, one week’s pay or one and a half weeks’ pay for each full year of service, depending on your age in that year, up to 20 years and a capped weekly wage.
The statutory formula
For each full year you worked for your employer, you earn:
- 0.5 week’s pay for each full year you were under 22
- 1 week’s pay for each full year you were 22 or older but under 41
- 1.5 weeks’ pay for each full year you were 41 or older
Service is capped at 20 years, and weekly pay is the average over the 12 weeks before notice. For redundancies on or after 6 April 2026, weekly pay is capped at £751, so the most anyone can receive is 30 weeks at £751, which is £22,530. The cap changes each April, so check GOV.UK for the figure that applies to your date.
You normally need at least two years’ service to qualify. This guide covers Great Britain; Northern Ireland has its own rules, so check nidirect.
A worked example
Take someone aged 45 with 12 full years of service and gross weekly pay of £800. Working back from the dismissal date, their age in each year of service was 45, 44, 43, 42, 41 (five years at 1.5 weeks), then 40 down to 34 (seven years at 1 week).
| Item | Result |
|---|---|
| Years counted | 12 |
| Years at 1.5 weeks | 5 |
| Years at 1 week | 7 |
| Weeks’ pay earned | 14.5 |
| Weekly pay used | £751 (capped from £800) |
| Statutory redundancy pay | £10,889.50 |
The calculator on this site gives exactly that result. If the same person earned £700 a week, nothing would be capped and the payment would be £10,150, because 14.5 weeks multiplied by £700 is £10,150.
When the cap and the 20-year limit bite
Someone aged 58 with 25 years’ service and weekly pay of £900 has only the last 20 years counted. In those 20 years they were over 41 for 18 and aged 39 or 40 for the other two, which gives 29 weeks. At the £751 cap, the entitlement is £21,779. That is below the £22,530 maximum, because two of the years earned only one week each.
Because younger years earn less, long service matters most for people who join early but are over 41 at the time of redundancy.
What is paid separately
Statutory redundancy pay is only one part of a leaving package. These are separate:
- Notice pay: you are entitled to notice or pay in lieu of it, which is not part of the redundancy figure.
- Holiday pay: untaken accrued holiday is paid on top. The UK holiday entitlement explained guide shows how holiday builds up.
- Enhanced terms: many contracts pay more than the statutory formula. That is a contractual matter, so check your contract or staff handbook.
Tax on redundancy pay
Statutory redundancy pay under £30,000 is not taxable. The first £30,000 of termination payments is exempt, and anything above that is taxed as employment income. Pay in lieu of notice after your employment has ended is taxed in full and does not use the £30,000. Normal income tax rules still apply to the rest, as described in UK income tax explained: bands, allowance and how it's worked out, and NI treatment depends on the type of payment, so check GOV.UK.
Note: This is general information, not advice. Check your own entitlement with your employer, Acas or GOV.UK, and take advice if the sums are large.
Checking your figure before you agree
If your employer offers a package, ask for the calculation in writing: your age in each year, the years counted, the weekly pay used and whether the cap has been applied. Compare it with the statutory result from the calculator, because the offer should be at least that much. Do not forget the dates. The weekly cap depends on the date of the redundancy, and your service is measured to the end of your notice, so a small difference in timing can change the figure. If something does not add up, Acas offers free guidance, and checking GOV.UK is a good next step.
Try the calculator
Enter your age, full years of service, weekly pay and the current weekly cap in the Statutory redundancy pay calculator calculator to see the statutory figure. To compare it with your normal pay, try UK take-home pay, and see How to work out your take-home pay from a UK salary for how a payment fits into your income.
Open the free Statutory redundancy pay calculator
Worked example 2: a long-serving employee aged 52
Take someone aged 52 at dismissal with 20 full years of service on gross weekly pay of £1,000. Working back from the dismissal date, ages run from 52 down to 33 across the 20 years.
| Item | Result |
|---|---|
| Years counted | 20 |
| Years at 1.5 weeks (aged 41 or over) | 12 |
| Years at 1 week (aged 22 to 40) | 8 |
| Years at 0.5 week | 0 |
| Weeks’ pay earned | 26 |
| Weekly pay used | £751 (capped from £1,000) |
| Statutory redundancy pay | £19,526 |
The figure comes from the calculator for 2026/27. The weeks’ pay of 26 is 12 × 1.5 plus 8 × 1. Multiplying by £751 gives £19,526. This is below the £22,530 maximum, which would need 30 weeks and so can only be reached by someone who was 41 or over for all 20 years.
Worked example 3: a shorter service, uncapped pay
At the other end, a 21-year-old with 4 full years of service on £400 a week would earn half a week for each year. That is 2 weeks, or £800. A 35-year-old with 10 years on £650 a week gets 10 weeks, or £6,500, as £650 is below the cap. Age at the time of each year of service matters as much as the length of service.
| Person | Years | Weeks earned | Weekly pay used | Statutory pay |
|---|---|---|---|---|
| Aged 21, 4 years, £400 a week | 4 | 2 | £400 | £800 |
| Aged 35, 10 years, £650 a week | 10 | 10 | £650 | £6,500 |
| Aged 52, 20 years, £1,000 a week | 20 | 26 | £751 | £19,526 |
Step-by-step: work out your own figure
- Confirm eligibility. You normally need at least two years of continuous service. Check GOV.UK for exceptions.
- Count full years of service. Only complete years count, up to a maximum of 20 counted back from the end of employment.
- Find your age in each of those years. Anything under 22 earns 0.5 week, 22 to 40 earns 1 week, and 41 or over earns 1.5 weeks.
- Add up the weeks. This is your total weeks’ pay.
- Choose your weekly pay. Use the average gross pay over the 12 weeks before notice, capped at £751 for dismissals from 6 April 2026.
- Multiply the weeks by the weekly pay.
The redundancy calculator does steps 2 to 6 once you have entered your details. Check the dates with your employer, because the cap depends on when the redundancy takes effect.
Common mistakes and surprises
- Using your full wage when it exceeds the cap. Only the capped weekly figure is used in the statutory formula.
- Counting part years. Only full years of service count.
- Forgetting age bands. Years worked before 22 earn half as much, which matters for long-serving staff who joined young.
- Assuming the statutory figure is the whole package. Notice pay, accrued holiday and any enhanced terms are separate. See UK holiday entitlement explained.
- Assuming it is all tax free. The first £30,000 of termination payments is exempt, but pay in lieu of notice after your job has ended is taxed in full.
- Using Great Britain figures in Northern Ireland. The limits there are different, so check nidirect.
Alternative offers and what to ask
Employers sometimes offer a settlement agreement or an enhanced package. If so, it is worth checking:
- the figure compared with the statutory result;
- how notice, holiday and any bonus are treated;
- whether the payment is split between tax-free and taxable parts;
- what you are being asked to give up, such as the right to bring a claim.
A settlement agreement normally requires you to take independent legal advice, which the employer often contributes to. Acas offers free guidance on redundancy rights and consultation, and a union or solicitor can help if the sums are large. Once the payment arrives, see How to work out your take-home pay from a UK salary for how it fits into your overall income and National Insurance for employees: what you pay and why for how NI treats different payments.
Glossary
- Continuous service: unbroken employment with the same employer, usually needed for two years or more.
- Weekly pay cap: the maximum weekly pay used in the formula, set by the government and updated each April.
- Notice period: the time between being told your job is ending and the end date.
- Pay in lieu of notice: a payment instead of working your notice.
- Enhanced redundancy: a contractual payment that is higher than the statutory minimum.
Frequently asked questions
Does everyone get statutory redundancy pay?
You normally need at least two years of continuous service, and the dismissal must be a genuine redundancy. Some groups are excluded, so check GOV.UK for your situation.
Is the weekly cap my actual pay?
No. If you earn more than the cap, only the cap is used in the formula, so your redundancy pay will be lower than a calculation on your full wage. If you earn less, your real pay is used.
Can my employer pay more than the statutory amount?
Yes. Many contracts and company policies include enhanced redundancy pay. The statutory figure is the legal minimum, so look at your contract for anything extra.
Do the rules differ in Northern Ireland?
Yes. Northern Ireland has its own formula limits and weekly cap, so use nidirect for the figures there.
Does part-time work reduce my redundancy pay?
Part-time workers get the same formula, using their own average weekly pay. A lower weekly wage simply means a smaller sum.
Can I get redundancy pay if I am on a fixed-term contract?
Possibly. The end of a fixed-term contract without renewal can count as a dismissal for redundancy purposes if the other conditions are met. Check GOV.UK and Acas for your case.
How long does my employer have to pay redundancy?
There is no single date that suits every case. It should be paid on or around the termination date or as agreed in writing, so ask for the payment date and check with Acas if it is delayed.
Do I pay National Insurance on redundancy pay?
It depends on the type of payment in the package, and notice pay and wages are treated differently from redundancy pay. Check GOV.UK for the treatment of each part.