redundancy pay calculator uk

If you are searching for a redundancy pay calculator UK, the key thing to understand is that statutory redundancy pay follows a clear formula based on age, length of service, and weekly pay limits. The calculator above gives you a practical estimate so you can plan your next steps with more confidence.

How statutory redundancy pay is calculated in the UK

For each full year of service, you get a number of weeks' pay depending on your age in that year:

• 0.5 week’s pay for each full year when you were under 22
• 1 week’s pay for each full year when you were aged 22 to 40
• 1.5 weeks’ pay for each full year when you were 41 or older

The total number of weeks is then multiplied by your weekly pay (subject to the statutory cap if applicable). This gives the statutory redundancy payment estimate.

Who qualifies for statutory redundancy pay?

In general, employees can qualify if they:

• Are legally classed as an employee
• Have at least 2 years of continuous service with their employer
• Are being made redundant (rather than dismissed for misconduct or resigning)

Some workers are not entitled to statutory redundancy pay, and special rules can apply in public sector roles, insolvency cases, and fixed-term contract endings. Always review your contract and current government guidance.

What this calculator includes (and what it does not)

Included in this estimate

• Age-banded statutory formula
• 20-year service limit
• Optional weekly pay cap setting
• Transparent year-by-year breakdown

Not included in this estimate

• Enhanced contractual redundancy packages
• Payment in lieu of notice (PILON)
• Outstanding holiday pay
• Potential settlement agreements
• Tax treatment of any amounts above tax-free limits

Worked example

Imagine someone is 45 at dismissal, has 10 full years of service, and earns £800 per week. If the statutory cap is £700:

1. The calculator allocates each year into age bands.
2. It totals the age-weighted weeks.
3. It uses £700 (not £800) as weekly pay because of the cap.
4. Total pay = total statutory weeks × £700.

This is why two people with the same salary can still receive different redundancy amounts: age profile and years of service matter.

Statutory vs enhanced redundancy pay

Many employers offer more than the legal minimum. Enhanced terms may appear in:

• Your employment contract
• A staff handbook or policy document
• A collective agreement
• A settlement package during consultation

If your employer offers enhanced pay, use this calculator as a baseline and compare it with your formal offer.

Redundancy checklist: what to do next

• Confirm your continuous service date and dismissal date
• Check whether your employer is using statutory or enhanced terms
• Ask for a written breakdown of calculations
• Review notice pay, untaken holiday, and final salary separately
• Consider ACAS or independent legal advice if anything looks incorrect

FAQ

Is redundancy pay taxable in the UK?

Statutory redundancy pay is usually paid tax-free, and in many cases redundancy compensation up to a threshold is not taxed. Other payments (for example notice pay) may be taxed differently.

Does part-time work affect statutory redundancy pay?

Part-time employees can still qualify. Weekly pay for calculation is based on actual weekly earnings, then capped if the statutory limit applies.

Can I get redundancy pay with less than 2 years of service?

Usually no for statutory redundancy pay, though contractual terms can be more generous.

Where can I verify current official rules?

Use official guidance at GOV.UK: Redundancy pay and advisory support from ACAS.

Disclaimer: This page is for educational information and estimation only, not legal or tax advice.