Redundancy pay calculator

Statutory redundancy pay is worked out from three things: how long you have worked there, how old you were during each of those years, and your weekly pay. There is a cap on the weekly figure, so higher earners are paid as though they earned less.

This calculator applies the formula in section 162 of the Employment Rights Act 1996, which has not changed since 1996 — only the annual cap moves. It shows every step, so you can check the figure rather than take it on trust, and it handles Northern Ireland, which sets its own limits.

Used to work out which age band applies to each year of service.

The start of your continuous employment with this employer.

Including any statutory notice you are entitled to.

Before tax. If your pay varies, use the average over the 12 weeks before you were told.

Northern Ireland has its own statutory limits.

Optional. Enter it to see the tax position on a payment above the statutory minimum.

The short version

Who qualifies
Employees with two years' continuous service.
The formula
Half a week's pay per year under 22, one week for 22 to 40, one and a half from 41.
Two caps
A week's pay is capped, and only the most recent 20 years count. Both change each April.
Tax
Free of income tax and National Insurance up to £30,000.
Northern Ireland
Sets its own weekly cap and maximum, both higher than in Great Britain.

How to use the redundancy pay calculator

  1. Enter your date of birth Age is counted for each year of service separately, reckoning backwards from the date employment ends. It is not your age today applied to every year.
  2. Enter your employment start date The start of your continuous employment with this employer. A TUPE transfer usually preserves continuous service from the earlier employer.
  3. Enter the date employment ends Include any statutory notice you are entitled to. Statutory notice counts towards continuous service, and working it can take you past a work anniversary — which is worth an extra week of pay.
  4. Enter your gross weekly pay Before tax. If your pay varies, use your average over the 12 weeks before you were told about the redundancy, skipping any week you were not paid.
  5. Check the result against your employer The workings show the weeks in each age band and whether the cap was applied. If your employer’s figure differs, ask them which dates and which weekly pay they used.

Worked examples

Common questions

Who qualifies for statutory redundancy pay?

Employees with at least two years of continuous service who are dismissed by reason of redundancy. Agency workers and the genuinely self-employed do not qualify. Being offered suitable alternative work and unreasonably refusing it can also remove the entitlement.

Is statutory redundancy pay taxed?

No. Redundancy payments are tax free up to £30,000, and statutory redundancy pay can never reach that ceiling. Enhanced payments above the statutory minimum are treated differently, and pay in lieu of notice is taxed in full as earnings.

Why is the weekly pay capped?

The statute caps the weekly figure used in the calculation. Someone earning £1,200 a week is paid as though they earned the cap, which for higher earners is the single largest factor in the result. Many employers pay an enhanced amount using actual salary instead.

Does my notice period change the figure?

It can. Statutory notice counts towards continuous service, so if working it takes you past a work anniversary you gain another year in the calculation. Statutory redundancy pay should be calculated on that basis even if you are paid in lieu.

What if my pay varies week to week?

Use the average of your gross weekly pay over the 12 weeks ending with the last complete week before you were told. Weeks with no pay are skipped and earlier weeks used instead, so unpaid leave does not drag the average down.

Is Northern Ireland different?

Yes. The formula is the same but the statutory limits are set separately and are currently higher than in Great Britain. Select Northern Ireland and the calculator uses its own figures.

What if my employer will not pay?

Raise it in writing first. A written claim to your employer within six months of your employment ending is enough to protect your right to the payment, under section 164 of the Employment Rights Act 1996. If they still do not pay, you can refer it to an employment tribunal. Acas offers free advice on 0300 123 1100 and their early conciliation is a required step before most claims.

Does service beyond 20 years count?

No. Only your most recent 20 years are used, so crossing another anniversary changes nothing once you are past that. Your age can still shift the figure slowly, as older years enter the counted window at the higher rate and replace lower-rated ones.

What the terms mean

Statutory redundancy pay
The legal minimum payment when a job is made redundant, based on age, length of service and weekly pay. It requires two years' continuous service.
Continuous employment
Unbroken service with the same employer, including statutory notice. It decides both whether you qualify and how much you get.
Relevant date
The date employment ends for the purposes of the calculation. Where an employer gives less than statutory notice, it is the date that notice would have expired.
A week's pay
Your normal weekly pay, capped at a figure set each April. Where pay varies, it is the average over the twelve weeks before the relevant date.
Age bands
Half a week per year worked under 22, one week for 22 to 40, one and a half from 41. Applied by counting backwards from the date employment ends.
The 20-year cap
Only the most recent 20 years of service count, however long you have worked there.
Enhanced redundancy pay
Anything above the statutory minimum, under a contract or collective agreement. Its own terms decide how service is counted.

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Figures on this page are checked against primary sources and dated. They are not legal, tax or financial advice.

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