UK · 2025/26
UK Redundancy Pay Calculator
Work out your statutory redundancy pay. Enter your age, years of continuous service, and weekly pay. The calculator handles the age bands, the 20-year service cap, and the statutory weekly pay cap.
Redundancy calculator
Used as-is up to the statutory cap of £700 per week. Earnings above the cap are ignored.
Statutory redundancy pay
£7,500
12.5 weeks of pay at £600 per week.
| Age band | Years | Weeks / year | Total weeks | Pay |
|---|---|---|---|---|
| Aged 41 and over | 5 | 1.5 | 7.5 | £4,500 |
| Aged 22 to 40 | 5 | 1 | 5 | £3,000 |
Tax: Genuine statutory redundancy payments are tax-free up to £30,000. PILON, accrued holiday and bonuses are treated separately and may be fully taxable.
This calculator gives the statutory minimum only. Many employers offer enhanced packages; your contract or HR policy is the source for any additional amount. Not legal or financial advice.
How statutory redundancy pay works
If you’ve been an employee with at least two years of continuous service and you’re made redundant, the Employment Rights Act 1996 sets a minimum amount your employer must pay you. It’s tax-free up to £30,000. The formula is age-banded and capped, which is why the number can look surprisingly low compared with your actual earnings.
The age bands
The law treats each year of service differently depending on how old you were during it.
- Years worked under age 22 count as half a week’s pay each.
- Years worked aged 22 to 40 inclusive count as one week’s pay each.
- Years worked aged 41 and over count as one and a half weeks’ pay each.
The two caps
Two caps reduce the amount, often significantly.
The first is on service. Only the most recent 20 years of continuous employment count. If you’ve been at the same place for 25 years, the first 5 are ignored.
The second is on weekly pay. For redundancies on or after 6 April 2024 the statutory cap is £700 per week in England, Wales and Scotland. Anything you earn above that is ignored for the calculation. The cap is uprated each April; check gov.uk for the current figure if you’re reading this much later.
What counts as a year of service
Continuous service with the same employer, including periods of paid leave. Time spent with a previous employer can count if the business was transferred (TUPE). Periods of self-employment don’t count, even if you were doing the same work for the same client.
Beyond the statutory minimum
Many employers offer enhanced redundancy packages. Whatever you receive on top of the statutory minimum is called contractual redundancy pay. The two add together. Your employer’s policy, your union agreement (if any), and your written contract are where the contractual amount comes from. The calculator above only covers the statutory floor.
Tax
Genuine redundancy payments are tax-free up to £30,000. Anything above that is taxed as income. If your payment includes PILON, accrued holiday, or a non-contractual bonus, those are treated differently and may be fully taxable. The gov.uk redundancy guidance explains the breakdown.
What happens to the money after it lands is a separate question worth thinking about before payday. A lump sum is unusual income, and the choices you make in the first month (paying down debt, topping up the pension to extend the tax-free portion, leaving it in an easy-access account while you job-hunt) have outsized long-term impact. PennyWise Finance covers managing a lump sum after redundancy in more detail if that’s where you’re heading.
This calculator gives the statutory minimum only. It does not include enhanced contractual amounts, notice pay, holiday pay, or any tax treatment. For your specific situation, contact ACAS or an employment-law solicitor.