UK Redundancy Pay Calculator 2026/27

Free UK redundancy pay calculator 2026/27. Statutory pay by age, service and weekly pay — £751 cap, notice entitlement and the £30k tax-free threshold.

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How UK statutory redundancy pay works

Unlike US severance, which is a negotiation, UK statutory redundancy pay is a legal entitlement with a fixed formula. If you qualify, your employer must pay it — there is no discretion involved.

The formula applies an age-based multiplier to each year of service: half a week's pay for years worked while under 22, one week's pay for years between 22 and 40, and one and a half weeks' pay for years at 41 or over. The band depends on your age during each individual year, not your age when the redundancy takes effect.

Worked example. You are 50 with 5 years of service and gross weekly pay of £600. All five years were worked at 41 or over, so each carries the one-and-a-half-week multiplier: 5 × 1.5 = 7.5 weeks, and 7.5 × £600 is £4,500. Only complete years count — eleven months in your final year adds nothing. Where service straddles your 41st birthday, use the calculator's year-by-year breakdown rather than applying one multiplier across all your service.

  • Under 22: half a week's pay per full year
  • 22 to 40: one week's pay per full year
  • 41 and over: one and a half weeks' pay per full year
  • Service counts up to 20 years maximum

The 2026 weekly cap and statutory maximum

Weekly pay does not count without limit. From 6 April 2026 the statutory cap is £751 a week in Great Britain and £783 in Northern Ireland. Earn more than that and only the capped figure counts toward statutory redundancy pay.

Because both weekly pay and years of service are capped, there is a hard ceiling. Twenty years all in the 41-plus band gives 30 weeks, and 30 × £751 = £22,530 — the maximum statutory redundancy payment in Great Britain.

Rates are reviewed each April, so a redundancy taking effect either side of 6 April can be calculated on a different cap. If your termination date is close to the changeover, confirm which year applies.

Who qualifies

You need at least two years of continuous service and you must be an employee rather than genuinely self-employed. Employment status can be contested where the contractual label does not match how the relationship actually operated.

The dismissal must also be a genuine redundancy — the role disappearing, the workplace closing, or the employer needing fewer people for work of that kind. A dismissal presented as redundancy where the role is promptly refilled is something else, and a different claim.

You can lose the entitlement by unreasonably refusing suitable alternative employment offered by the employer. Suitability is assessed objectively against pay, status, location and hours, so take advice before refusing an offer rather than after.

What you get on top of redundancy pay

Redundancy pay is not the whole package, and treating it as the total is where people most often lose money.

Statutory notice is a separate entitlement: one week for service between one month and two years, one week per complete year between two and twelve years, capped at twelve weeks. It is paid in addition to redundancy pay, never instead of it, and your contract may provide considerably more.

Accrued untaken holiday, outstanding salary, expenses and any contractual bonus are all separate again. Where a contract or policy provides enhanced redundancy terms, those replace the statutory calculation rather than topping it up — check the handbook.

  • Statutory or contractual notice pay
  • Accrued untaken holiday
  • Outstanding salary, expenses and contractual bonus
  • Enhanced redundancy pay where a contract, policy or collective agreement provides it

Tax: the £30,000 threshold and what falls outside it

A genuine redundancy payment is tax-free up to £30,000. Statutory redundancy pay always sits under that, since the statutory maximum is £22,530, so statutory pay alone is never taxed.

Notice pay is treated differently and this catches people out. Pay in lieu of notice is taxed in full as earnings through PAYE with National Insurance, and it does not use any part of the £30,000 allowance. The same applies to outstanding salary and holiday pay.

Enhanced packages frequently exceed £30,000, and the excess is taxed as employment income at your marginal rate. How each element is characterised matters more than what it is called — HMRC looks at what the payment is actually for, so relabelling notice pay as redundancy compensation does not change the treatment.

If your employer will not pay

Statutory redundancy pay is a legal entitlement, and there is a route when an employer refuses or underpays.

Put the calculation in writing first — most disputes turn on service dates or the weekly pay figure rather than the principle. Acas provides free advice and runs Early Conciliation, which is a required step before bringing most employment tribunal claims.

Time limits are short and strictly enforced, generally three months less one day from the date of dismissal. Where the employer is insolvent, statutory redundancy pay can be claimed from the government's Redundancy Payments Service instead.

Frequently Asked Questions

How is statutory redundancy pay calculated in the UK?

Half a week's pay per full year worked while under 22, one week per full year between 22 and 40, and one and a half weeks per full year at 41 or over. Weekly pay is capped at £751 in Great Britain from 6 April 2026, and service counts up to 20 years. Only complete years count.

What is the 2026 redundancy weekly pay cap?

£751 a week in Great Britain and £783 in Northern Ireland from 6 April 2026. If you earn more, only the capped figure counts toward statutory redundancy pay. The rates are reviewed each April.

What is the maximum redundancy pay in the UK?

£22,530 in Great Britain. Twenty years of service at the highest multiplier of one and a half weeks per year gives 30 weeks, and 30 × £751 = £22,530. Reaching it requires having been 41 or over throughout a 20-year qualifying period.

Who qualifies for statutory redundancy pay?

Employees with at least two years of continuous service, where the dismissal is a genuine redundancy — the role disappearing, the workplace closing, or fewer people being needed for that work. Genuinely self-employed contractors do not qualify, and unreasonably refusing suitable alternative work can forfeit the entitlement.

Is redundancy pay taxed in the UK?

Genuine redundancy payments are tax-free up to £30,000, and statutory redundancy pay always falls under that because the maximum is £22,530. Notice pay, outstanding salary and holiday pay are taxed as earnings through PAYE and do not use up the £30,000 allowance.

Do I get notice pay as well as redundancy pay?

Yes, they are separate entitlements. Statutory notice is one week for service between one month and two years, one week per complete year between two and twelve years, capped at twelve weeks. Your contract may provide more. Notice pay is in addition to redundancy pay.

What is enhanced redundancy pay?

Any redundancy payment above the statutory minimum, provided through a contract, handbook, redundancy policy or collective agreement. Enhanced schemes commonly remove the weekly cap, increase the multiplier, or lift the 20-year service limit — which matters most if you earn well above £751 a week.

What if my employer refuses to pay redundancy?

Put the calculation in writing, since disputes usually concern service dates or the weekly pay figure. Acas offers free advice and Early Conciliation, a required step before most tribunal claims. Time limits are generally three months less one day from dismissal. If the employer is insolvent, claim from the Redundancy Payments Service.

Disclaimer

This calculator provides an estimate of statutory redundancy pay for planning purposes. It is not legal or financial advice and cannot account for enhanced contractual terms or disputed service dates. Statutory rates change each April — check current figures on GOV.UK. Acas provides free advice, and you should take advice from an employment solicitor before accepting a settlement agreement.

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