Updated for July 2026
In short
| If your employment ends by reason of redundancy on or after 6 April 2026 and you have at least two years’ continuous service, your statutory redundancy payment is worked out from three things: your age, your complete years of service (capped at 20 years) and your gross weekly pay (capped at £751). The maximum statutory redundancy payment is £22,530. Many employers pay more than the statutory minimum under an enhanced scheme, and where they do, the extra is almost always paid under a settlement agreement. |
How this redundancy calculator works
The calculator delivers two results. The first uses the statutory weekly cap of £751 (which applies where the dismissal takes effect on or after 6 April 2026) to arrive at your statutory redundancy pay entitlement. The second result ignores the weekly cap, which is the more useful figure if your employer operates an enhanced redundancy scheme or you are negotiating a package. Always check that the figures you enter for length of service, age and weekly pay are correct, and take advice on your entitlements before you sign anything.
Redundancy Calculator
Who is entitled to a statutory redundancy payment?
You will normally be entitled to a statutory redundancy payment if you are an employee, you have two or more years’ continuous service, and your employment ends by reason of redundancy.
There are exceptions. You will not receive a statutory redundancy payment if you unreasonably refuse an offer of suitable alternative employment, or the dismissal is for a reason other than redundancy. A small number of categories are excluded altogether, including crown servants, members of the armed forces and share fishermen — GOV.UK sets out the full list.
If you are not certain that what has happened to you is a genuine redundancy, our guide to redundancy and settlement agreements explains how the two fit together.
How is statutory redundancy pay calculated?
Statutory redundancy pay is calculated using a statutory formula (section 162, Employment Rights Act 1996) based on your age, your length of service and a week’s pay. There are three steps.
Step 1: Calculating length of continuous employment
Only complete years count. The maximum number of years’ service that counts is 20, even if you have been employed for longer.
Start by working out the ‘relevant date’ on which your employment is treated as ending for the purposes of the redundancy pay calculation. Where you work at least your full statutory minimum notice, that will be your last day of employment.
But if you do not work your full statutory notice entitlement — for example because your employer terminates immediately and pays you in lieu of notice — the unworked statutory notice is added on. This can make a real difference if it takes you over another complete year of service.
Tip: Statutory minimum notice is one week’s notice for each complete year of service, up to a maximum of 12 weeks (section 86, Employment Rights Act 1996). Only the statutory notice is added on — if your contractual notice is longer, the extra does not count towards this calculation.
Step 2: Applying the age bands
Once you have the relevant date you can work backwards through your service and apply three age bands:
- one and a half weeks’ gross pay for each complete year of service in which you were aged 41 or over
- one week’s gross pay for each complete year of service in which you were aged 22 to 40
- half a week’s gross pay for each complete year of service in which you were under 22
There is no upper or lower age limit, although in practice the two-year qualifying period means the youngest an employee can be is around 20.
Does the year you turn 41 count at the higher rate?
Usually no. For part of that year of service you were under 41, so the whole year falls into the lower band — unless your birthday happened to fall on the first day of that year of service. The same approach applies to the year in which you turn 22.
Worked example: how a payment in lieu of notice can add a year
An employee aged 37started work on 25 June 2019. The employer ends the employment without notice on 7 June 2024 and pays in lieu of the four weeks’ statutory notice (one week for each complete year of service). At 7 June 2024 the employee has four complete years’ service. Because the notice was not worked, the four weeks is added on, moving the relevant date to 5 July 2024 — past the fifth anniversary on 25 June 2024. The employee therefore has five complete years’ service rather than four, which is worth an extra week’ pay subject to the weekly pay cap.
Step 3: Calculating a week’s pay
Once you have the total number of weeks, you need to work out a week’s pay.
This is your gross pay (before income tax and National Insurance) subject to a statutory cap, which is reviewed each 6 April. Where the dismissal takes effect on or after 6 April 2026, the weekly maximum is £751.
The week’s pay for salaried employees, or hourly paid employees with normal working hours, will usually be basic pay. Bonuses and commission are not included, and overtime does not usually count unless it is guaranteed. Where your pay varies despite normal working hours — piece work, for example — or varies with the time of work, such as shift patterns, a week’s pay is an average taken over the previous 12 weeks.
If you do not have normal working hours, a week’s pay is an average of all remuneration over the previous 12 weeks. Weeks in which no remuneration was payable are ignored, and the calculation reaches back to the next earliest week to make up the 12.
The 12 weeks are counted back from the calculation date, which for redundancy pay is generally the date your employer gave you notice rather than the date your employment actually ended.
What is the maximum statutory redundancy payment?
The most anyone can receive is 30 weeks’ pay — based on 20 or more years of service, all of it in the highest age band. Where the dismissal takes effect on or after 6 April 2026, that is 30 × £751, or £22,530. If the figure your employer has offered you is materially higher than that, the excess is contractual or discretionary enhanced redundancy pay rather than a statutory entitlement, and it will normally be conditional on you signing a settlement agreement.
Is statutory redundancy pay taxable?
Statutory redundancy pay is treated as compensation rather than earnings, so it is not subject to income tax or National Insurance. It does, however, count towards the £30,000 tax-free threshold that applies to termination payments as a whole — so if you are receiving other compensation on top, the statutory payment reduces the headroom. Our guide to how settlement agreement payments are taxed explains how the threshold is applied in practice.
What if you are offered more than the statutory amount (enhanced redundancy pay)?
Many employers pay enhanced redundancy terms, whether under a contractual policy, a collective agreement or a mutually agreed resignation scheme. Enhanced terms are almost always conditional on signing a settlement agreement, and the offer will usually include your statutory entitlement rather than sitting on top of it — so read the breakdown carefully. Our settlement agreement calculator gives you a broader sense of what a full package might be worth.
How do employers calculate an enhanced redundancy payment?
Some employers will use a formulae that is based on the statutory formulae, but remove the caps or limits, or apply a multiplier. Others may simply provide a fixed amount of pay on top of the statutory redundancy entitlement. Example methods include:
- The statutory calculation, but using actual gross weekly pay in place of the capped figure. This is a most common form of enhancement.
- A multiple of the statutory calculation — commonly 1.5, 2 or 3 times.
- A fixed number of weeks’ actual pay for each complete year of service, with the age bands removed — commonly 2, 3 or 4 weeks per year.
- One month’s actual pay for each complete year of service.
- The statutory calculation with the 20-year service cap lifted.
- A fixed lump sum plus a service-related element, for example £5,000 plus two weeks’ pay for each complete year.
- The statutory entitlement plus a specified number of months’ pay, e.g. statutory plus one months pay.
Most schemes then apply an overall ceiling, either as a maximum number of weeks or as a cap expressed in months’ pay. Public sector schemes in the NHS, the civil service and local government are set out in national terms, are generally more generous, and carry their own caps and eligibility conditions.
What if you do not think the redundancy is genuine?
The redundancy payment is only part of the picture. If the real reason for your dismissal is not redundancy, or the selection process was unfair, you may have a claim worth considerably more than the statutory sum. Our guide to unfair redundancy sets out the warning signs, and Acas guidance on your rights during redundancy covers what a fair process should look like.
If your employer has raised the subject in an off-the-record conversation, the protected conversation rules under section 111A and the without prejudice rule, govern what can later be put before a tribunal.
Can a settlement agreement take away your statutory redundancy pay?
A claim for redundancy pay (statutory or contractual) can be settled by a valid settlement agreement. However, where the dismissal is genuinely by reason of redundancy, the statutory payment is an entitlement, and a well-drafted agreement should record it as a separate, identified figure rather than absorbing it into a global compensation sum. Sometimes the settlement agreement offer letter, making you an enhanced offer, will specify the offer is inclusive of your statutory entitlement. There are several types of claim that a settlement agreement cannot validly settle at all.
Getting advice on your redundancy package
If you have been offered a settlement agreement, you must take independent legal advice on its terms before it can bind you. Our guide explains what a settlement agreement solicitor actually does.
Speak to a specialist about your redundancy
| We advise employees on settlement agreements at a fixed fee, and under our costs promise you will normally pay nothing yourself where your employer contributes to your legal fees. Call 0800 861 1883 or request a callback. |
IMPORTANT: The contents of this page are general guidance only and should not therefore be regarded as constituting legal, tax, financial or other advice or recommendations. The calculator is for guidance only and you should always check your entitlements with a solicitor that has considered your particular circumstances.
