Redundancy Pay Calculator

How UK Statutory Redundancy Pay Works

Statutory redundancy pay is a legal right for employees in the United Kingdom who have been continuously employed for at least two years. It is calculated based on your age during each year of service, your weekly pay (subject to a cap), and the number of complete years you have worked for your employer.

The Age Band System

The calculation uses three age bands. For each complete year of service where you were under 22, you receive half a week's pay. For years where you were aged 22 to 40, you receive one week's pay. For years where you were 41 or over, you receive one and a half weeks' pay. The calculation works backwards from your redundancy date, so your most recent years of service are counted first.

Weekly Pay Cap

Your weekly pay is capped for the purposes of statutory redundancy. From 6 April 2025, the cap is £719 per week. If you earn more than this, the calculation uses £719 rather than your actual weekly pay. The cap is reviewed and typically increased each April by the government.

Maximum Service and Pay

Only the last 20 years of continuous service count towards statutory redundancy pay. This means the maximum possible entitlement is 30 weeks' pay (20 years at the highest rate of 1.5 weeks per year), which at the current weekly cap of £719 gives a maximum of £21,570 in England, Scotland, and Wales.

Tax Treatment

Statutory redundancy pay is tax-free up to £30,000. Since the maximum statutory payment is well below this threshold, most employees will receive their full statutory redundancy pay without any tax deduction. However, if your employer offers an enhanced redundancy package that takes the total above £30,000, the excess will be subject to income tax.

Enhanced Redundancy

Many employers offer redundancy packages that are more generous than the statutory minimum. These enhanced packages might use your actual weekly pay without the cap, count more years of service, or apply higher multipliers. Always check your employment contract and company redundancy policy. Your employer cannot offer less than the statutory amount, but they can offer more.