What appears in the final pay packet
A standard UK redundancy final pay shows up as one payslip with several lines. Salary up to the last working day (or up to the PILON date), unused holiday paid out, any contractual bonus or commission earned but not yet paid, statutory redundancy pay, and any ex-gratia or enhanced redundancy amount. Each line is calculated separately because each is taxed differently.
Salary, PILON, holiday pay, and any earned bonus are taxed as earnings under PAYE and National Insurance. Statutory redundancy and any ex-gratia portion are tax-free up to a combined £30,000; anything above that figure is taxed as earnings.
Timing
There’s no UK rule requiring final pay within a specific number of days. The default is your normal payroll cycle. So if you’re paid monthly on the 25th and your last working day is the 10th, you’ll get your final pay on the 25th. If your last working day is the 26th, you’ll get most of your salary on that month’s payday and a smaller final amount on the following 25th.
The redundancy and ex-gratia elements are sometimes paid slightly outside the normal payroll cycle (often within seven days of termination), particularly where a settlement agreement has specific payment-date wording. Check the settlement document or the redundancy letter for the agreed date.
Tax: what’s in and what’s out of the £30k
The £30,000 tax-free termination allowance covers statutory redundancy and any ex-gratia portion of a redundancy or settlement payment, combined. It does not cover PILON, holiday pay, accrued contractual bonus, or anything you would have been paid as normal earnings if you’d carried on working.
That means for many people, the final pay packet has two tax buckets: one set of lines (PILON, holiday, salary, earned bonus) that’s fully taxable as earnings; one set (statutory redundancy, ex-gratia) where the first £30k is tax-free and anything above is taxed as earnings. The settlement agreement calculator on this site applies the split correctly.
P45 and tax codes
Your employer issues a P45 after your final pay is processed. Some employers send it the same day; others take a week or two. The P45 records your earnings and tax paid in the current tax year and is what you give to a new employer (or to JSA, if relevant) so your tax code is set correctly.
If you don’t receive a P45 within a month, chase HR or payroll. Without it, your next employer will put you on emergency tax until HMRC catches up, and you may overpay temporarily.
Things to check before you sign anything
If you’ve been given a settlement agreement alongside your redundancy, compare the figures to what’s actually owed. Statutory redundancy is non-negotiable and must match the section 162 ERA 1996 formula. PILON should equal your notice period × your normal pay; holiday should equal accrued days × daily rate; the ex-gratia is the negotiable bit. See can I negotiate a settlement agreement? for the typical levers.
For the statutory pieces, double-check the maths using the redundancy pay calculator, PILON calculator, and holiday entitlement calculator. Errors are common and easier to fix before the payment is processed than after.
If something’s wrong
Final-pay errors are common and usually fixable in the next payroll cycle. Raise it with payroll the day the pay lands (or as soon as you spot the issue). Most fixes go through quickly. If the employer refuses to fix it, escalate via a grievance, then ACAS early conciliation, then a tribunal claim if necessary. The time limit is three months less one day from the date the deduction was made.
Frequently asked questions
- When will I get my final pay after redundancy?
- On the next normal payday after your last working day. Most UK employers pay monthly on a fixed date, so depending on when you leave in the cycle, the wait can be up to a month. Statutory redundancy, PILON and holiday pay are usually all in that same packet.
- Do I get redundancy pay and notice pay together?
- Yes, normally in the same final payslip alongside accrued holiday and any contractual extras. They appear as separate lines for tax-treatment reasons but they're paid together. Statutory redundancy is tax-free up to £30,000; PILON and holiday are taxed as earnings.
- What if my employer hasn't paid me what they owe?
- Raise it in writing first, then ACAS early conciliation, then an employment tribunal. The time limit for an 'unauthorised deduction from wages' claim is three months less one day from the date the wages should have been paid, so don't sit on it. ACAS provides free advice and a conciliation service.
- Do I need to do anything with HMRC after redundancy?
- Usually no — your final employer processes PAYE for you and sends you a P45. Give the P45 to your next employer to make sure your tax code is right. If your redundancy package exceeds £30,000, the excess is taxable; if you've had unusually high pay in the final month, check your tax position via HMRC's online account in case adjustments are needed.
General information about UK redundancy pay, not legal or tax advice. For your specific situation, contact ACAS or an employment-law solicitor.