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.

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. If that fails you can bring an employment tribunal claim, but the time limit is short — generally three months less one day from the termination date. Acas offers free advice on 0300 123 1100 and their early conciliation is a required step before most claims.

Guides on this subject

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

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