redundancy payment calculator uk

How UK redundancy pay is calculated

In the UK, statutory redundancy pay is calculated using three key factors:

• Your age during each complete year of service.
• Your completed years of continuous employment (capped at 20 years).
• Your weekly pay (capped at the statutory weekly limit in force on your redundancy date).

Age-banded formula

For each full year worked, you get:

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

The calculator applies these bands year by year based on your age at dismissal and your completed service years.

Example calculation

Suppose an employee is made redundant at age 46, has 10 completed years of service, and earns £900 per week, with a weekly cap of £719:

• Years age 41+ counted at 1.5 weeks each where applicable
• Any years age 22 to 40 counted at 1 week each
• Weekly pay used is capped: min(£900, £719) = £719

Total redundancy payment = total statutory weeks × capped weekly pay.

What this calculator includes (and excludes)

Included

• UK statutory age bands
• Service-year cap (20 years)
• Statutory weekly pay cap (selected above)
• Basic eligibility warning for service under 2 years

Not included

• Enhanced contractual redundancy packages
• Payment in lieu of notice (PILON)
• Accrued but untaken holiday pay
• Tax treatment of wider termination packages
• Complex employment status disputes

Important UK redundancy rules to remember

1) Continuous service matters

Only complete years of continuous service are used in the statutory formula. Part-years are not usually counted for statutory redundancy pay.

2) Weekly pay can be capped

Even if your earnings are high, statutory pay is based on the legal weekly cap, not always your full salary.

3) Different rights may apply in special cases

Some situations involve additional protections, for example during maternity leave, TUPE transfers, or where redundancy selection is unfair. In these cases, expert advice may be needed.

Redundancy checklist: practical next steps

• Request your employer's written redundancy calculation.
• Check your contract for enhanced redundancy terms.
• Confirm notice entitlement and final salary payment date.
• Ask for a breakdown of holiday pay and deductions.
• Review pension and benefits end dates.
• Keep all consultation emails and letters.

Final thoughts

A redundancy payment calculator helps you estimate a fair baseline quickly. It is especially useful before consultation meetings, negotiations, or exit paperwork. Use the tool above to get your figure, then compare it with your employer's offer and contract terms.