Redundancy Pay Calculator

Statutory redundancy pay is based on your age, length of continuous service (capped at 20 years) and weekly pay (capped at £643 in 2026). For each complete year of service: you get 0.5 week's pay if you were under 22 during that year, 1 week's pay if you were 22–40, and 1.5 weeks' pay if you were 41 or over. The calculation works backwards from your dismissal date.

The statutory weekly pay cap is £643 for dismissals on or after 6 April 2026. If you earn more than £643 per week, the calculation uses £643 — not your actual pay. Your employer may choose to offer an enhanced redundancy package based on your actual salary, but the statutory minimum uses the cap.

The first £30,000 of any redundancy payment (statutory or enhanced) is tax-free. This includes the statutory amount plus any contractual redundancy pay. Amounts above £30,000 are taxed as income. Payments in lieu of notice (PILON) are always taxable if your contract includes a PILON clause. Holiday pay and outstanding wages owed are also taxable as normal earnings.

You need at least 2 complete years of continuous service with the same employer to qualify for statutory redundancy pay. The maximum service counted is 20 years — even if you've worked there longer. You must also be an employee (not a contractor) and be under notice of redundancy. Agency workers, self-employed contractors and employees with under 2 years' service have no statutory redundancy entitlement.

Yes. Many employers offer enhanced redundancy packages that exceed the statutory minimum. Common enhancements include using actual weekly pay instead of the £643 cap, counting more than 20 years, or applying a flat multiplier (e.g. 2 weeks per year). The £30,000 tax-free threshold still applies to the total package. Check your employment contract and any collective agreements for details.