redundancy pay uk calculator

How statutory redundancy pay works in the UK

If you are made redundant in the UK, your employer may be required to pay statutory redundancy pay. The amount is based on three main factors:

• Your age
• Your full years of continuous service
• Your weekly pay (subject to a legal weekly cap)

The formula is tiered by age and counts only complete years. By law, a maximum of 20 years of service can be included in the calculation.

Eligibility checklist

You would typically qualify for statutory redundancy pay if:

• You are classed as an employee (not self-employed contractor).
• You have at least 2 years of continuous service with your employer.
• You are being dismissed because your role is genuinely redundant.

You may not qualify in some circumstances, for example if your employer offers suitable alternative employment and you unreasonably refuse it, or if your contract ends naturally and redundancy rules do not apply.

Redundancy formula used by this calculator

Weeks of pay per year of service

• 0.5 week for each full year worked under age 22
• 1 week for each full year worked age 22 to 40
• 1.5 weeks for each full year worked age 41 and over

Key limits

• Maximum service counted: 20 years
• Weekly pay used is capped at the statutory maximum set each year
• Only full years of service are included

Example calculation

Suppose someone is age 45, has 10 full years of service, and earns £800 per week. If the statutory weekly cap is £719:

• Years age 41+ counted: 5 years × 1.5 = 7.5 weeks
• Years age 22–40 counted: 5 years × 1 = 5 weeks
• Total entitlement: 12.5 weeks
• Statutory pay: 12.5 × £719 = £8,987.50

What this calculator includes and excludes

Included

• Statutory age bands
• 20-year service cap
• Weekly pay cap input so you can use the current legal figure

Not included

• Contractual redundancy enhancements (some employers pay more)
• Payment in lieu of notice (PILON)
• Untaken holiday pay
• Tax treatment specific to your payslip and settlement structure

Practical tips before accepting a redundancy package

• Ask HR for a written breakdown: statutory, enhanced, notice, and holiday components.
• Check your start date and continuity of service carefully—small date errors can change the amount.
• Review your contract and staff handbook for enhanced terms.
• Verify the weekly cap used is correct for your redundancy date.
• Take advice if you are asked to sign a settlement agreement.

Frequently asked questions

Is redundancy pay taxed?

Redundancy payments can have different tax treatment depending on what portion is statutory redundancy, enhanced compensation, notice pay, and other earnings. Always check current HMRC guidance or get payroll advice for your exact case.

Can I get more than statutory redundancy pay?

Yes. Many employers offer enhanced redundancy terms in contracts, collective agreements, or discretionary packages.

What if I have less than 2 years of service?

In most situations, statutory redundancy pay is not due below 2 full years of continuous service, though other rights may still apply.

Final note

This redundancy pay UK calculator is designed as a quick planning tool. Use it to sense-check offers and prepare questions for HR. For legal disputes or complex situations, consult an employment adviser, union representative, ACAS, or a qualified solicitor.