Redundancy Calculator

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How the calculator works

The calculator delivers two results. The first uses the statutory weekly capped figure of £700 (which applies to dismissals that occur in the financial year starting 6 April 2024) to arrive at a statutory redundancy pay entitlement. The second result does not have a weekly cap. You should always check the figures you put into the calculator, for length of service, age and weekly pay are correct, and seek legal advice on your entitlements.

Redundancy Calculator

Redundancy Calculator

Who is entitled to a statutory redundancy payment?

Employees with 2 or more continuous years service will be entitled to a statutory redundancy payment if their employment ends by reason of redundancy?

How is a redundancy payment calculated?

Statutory redundancy pay is calculated using a formula that uses the employee’s age, length of service, and weekly pay.

Calculating length of continuous employment

Only complete years count. The maximum number of years service that counts is 20, even if the employee has been employed longer.

Start by working out the relevant date the employee’s employment is deemed to end for the purposes of a redundancy pay calculations. Where the employee works at least their full statutory minimum notice, that will be their last day of employment.

But if the employee does not work their full statutory notice entitlement, for example the employer agrees terminates and pays in lieu of notice, add on the unworked statutory notice entitlement. This may make a real difference to the calculations if it results in the employee getting another complete year of service.

Tip: The statutory minimum notice is one weeks pay for each complete year up to a maximum of 12 weeks (Section 86, Employment Rights Act 1996). If notice is not served, you don’t add on the contractual notice if that’s greater than the statutory notice entitlement.

Once you have the ‘relevant date’ you can work backwards to work out the entitlements as follows:

  • 1.5 weeks gross pay for each complete year of service they were age 41 or above.
  • 1 weeks gross pay for for each complete year of service they were aged 22-40.
  • half a week’s pay for each full year you were under 22.

There is no minimum of maximum age.

What about years when the employee turns 41 should that be treated in the top bracket meaning you get 1.5 weeks? The answer will usually be ‘no’ because for part of that year they were below the age of forty-one (assuming their birthday was not on the first day of the year). The same approach is taken to a years an employee turns 22.

Worked Example:

An employee commenced employment on 25 June 2019 and the employer ends an employee’s employment without notice on 7th June 2024, and makes a payment in lieu of their 4 weeks statutory notice entitlement (i.e. one weeks notice for each complete year of service). However, for the purposes of calculating statutory redundancy pay, because the employee did not work their notice entitlement, the 4 weeks notice is added on, taking the employee to 5 weeks complete years service, rather than 4.

Calculating a weeks pay

Once you have the total weeks you need to work out a weeks pay.

This is the employee’s gross pay (i.e. before income tax and national insurance deductions) subject to a statutory cap, which is updated each 6th April, increasing in line with the retail price index. For the year beginning 6 April 2024 the weekly maximum is £700.

The weeks pay for salaried employees or hourly paid employees with normal working hours will usually be their basic pay; bonuses and commission are not included. Overtime does not usually count unless it is guaranteed. Where the employee’s pay varies despite having normal hours, e.g. piece work, or it varies because of the time of work, e.g. shift patterns, a weeks pay is based on an average based on normal working hours over the previous 12 weeks.

If the employee does not have normal working hours, a weeks pay is based on an average of all remuneration over the previous 12 weeks. Weeks where no remuneration was payable are ignored and the calculation includes the next earliest week to get to 12 weeks to work out the average.

IMPORTANT: The contents of this page are general guidance only and should not therefore be regarded as constituting legal 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.

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