Redundancy Pay Calculator




Redundancy is one of those things nobody plans for and everybody should understand before it happens. This redundancy pay calculator estimates your statutory redundancy pay — the legal minimum your employer must pay — using the 2026/27 limits. Enter your age, years of continuous service and weekly pay, and you’ll get your figure with the maths shown.

Two things to know upfront. First, this is the statutory floor: many employers pay more, either through contracts or enhanced schemes. Second, you need 2 years of continuous service with the same employer to qualify at all. Under two years, there’s no statutory entitlement — though you may still be owed notice pay and unused holiday.

In short: statutory redundancy pay is based on your age, years of continuous service and weekly pay — half a week’s pay for each year worked under 22, one week’s pay for each year aged 22 to 40, and one and a half weeks’ pay for each year from 41. For 2026/27, weekly pay is capped at £751 and only the most recent 20 years count, giving a maximum payment of £22,530. You need at least 2 years’ continuous service to qualify.

How this redundancy pay calculator works

Forget percentages of salary — it’s a formula based on your age during each year you worked. For each complete year of continuous service, you get:

Age during that year Weeks’ pay per year
Under 22 0.5 weeks
22 to 40 1 week
41 and over 1.5 weeks

You work backwards from your current age, assigning each year of service to the band you were in when you worked it. Only the most recent 20 years count — anything before that is ignored.

Then two caps apply:

2026/27 limit (Great Britain) Figure
Weekly pay cap £751
Maximum years of service counted 20
Maximum statutory payment £22,530

The weekly cap is the one that bites higher earners. If you earn £900 a week, the formula uses £751. The maximum of £22,530 is what you’d get with 20 years all worked at age 41 or over (20 × 1.5 × £751). These limits are reviewed every April — redundancies from 6 April 2026 use the figures above. If you’re unsure of your exact figure, work out your normal weekly pay first with our pro rata salary calculator.

Worked examples

Example 1: 48 years old, 12 years’ service, £600/week

£600 is under the £751 cap, so full weekly pay is used. Counting back 12 years from age 48 gives years worked at ages 36–47:

  1. Ages 36–40: 5 years × 1 × £600 = £3,000
  2. Ages 41–47: 7 years × 1.5 × £600 = £6,300
  3. Total: £3,000 + £6,300 = £9,300

Example 2: 28 years old, 6 years’ service, £800/week

£800 is over the cap, so weekly pay is capped at £751. Counting back 6 years from 28 gives ages 22–27, all in the 1× band:

  1. 6 years × 1 × £751 = £4,506

The cap cost this person £294 — without it, the figure would have been 6 × £800 = £4,800.

Example 3: 55 years old, 22 years’ service, £900/week

Only the most recent 20 years count, and pay is capped at £751. Counting back 20 years from 55 gives ages 35–54:

  1. Ages 35–40: 6 years × 1 × £751 = £4,506
  2. Ages 41–54: 14 years × 1.5 × £751 = £15,771
  3. Total: £4,506 + £15,771 = £20,277

That’s under the £22,530 maximum, so the full £20,277 is payable. The two oldest years of service (ages 33–34) are simply discarded — the 20-year cap doesn’t negotiate.

The 2-year qualifying rule

You need 2 years of continuous service with the same employer. Continuous is doing some work here: changing roles, getting promoted, or moving departments within the same employer doesn’t break continuity. Being dismissed and rehired might, depending on the gap. If you’re close to the 2-year mark when redundancy consultations start, the exact dates matter enormously — take advice rather than assuming.

Is redundancy pay taxable?

The first £30,000 of any redundancy payment is free of Income Tax — and that covers the statutory payment plus any enhanced or contractual top-up your employer adds, combined. Since the maximum statutory payment is £22,530, statutory redundancy pay on its own is essentially always tax-free. Tax only enters the picture when an enhanced package pushes the total over £30,000.

Keep in mind that redundancy pay above £30,000 is subject to tax and NI — our National Insurance calculator covers how the NI side works. Above £30,000, the excess is taxed as income (and employer NI applies).

Part-time workers: same formula, same rights

Part-timers are entitled to statutory redundancy pay on exactly the same basis as full-time staff. The formula uses your actual weekly pay, not your hours — so there’s no separate reduced rate, no pro-rating of the multipliers. A part-timer doing 3 shifts a week with 10 years’ service gets the same number of weeks’ pay as a full-timer with 10 years’ service; the weekly pay figure is just lower because they earn less.

If your employer can’t pay: insolvent employers

Your employer pays statutory redundancy directly. But if the company is insolvent and can’t pay, you’re not out of luck — you can usually claim from the government’s Redundancy Payments Service instead. There’s a time limit (generally 6 months less a day from when your employment ended to apply), so don’t sit on it hoping the administrators sort things out. GOV.UK’s redundancy pay pages walk through the claim process.

NHS staff: you probably get more than this

NHS employees are usually covered by the NHS Terms and Conditions redundancy scheme, which beats the statutory minimum comfortably. Under the NHS scheme, it’s typically one month’s pay per year of service (with its own cap), not the weeks-based formula above — and there’s no £751 weekly cap working the same way. If you work for the NHS, treat this redundancy pay calculator as a statutory baseline only and check your Agenda for Change terms or trust policy for your real entitlement.

What your result means — and what to do next

Your result is the statutory minimum for 2026/27 based on the figures you entered. What to do with it:

  • Compare it against your employer’s offer. If they’re offering more — an enhanced package, pay in lieu of notice, ex-gratia sums — add it all up and check the £30,000 tax-free threshold. Anything over that is taxable.
  • Check your notice period and holiday. Statutory redundancy is separate from notice pay and accrued-but-untaken holiday, both of which you’re also owed. Don’t let anyone bundle them into one figure without showing the breakdown.
  • Get the settlement agreement checked. If your employer asks you to sign a settlement agreement, they’re required to contribute toward your legal advice. Use it — have a solicitor check the numbers and the wording.
  • If something feels off, ACAS offers free, confidential advice on redundancy rights. The redundancy pay calculator gives you the formula; they can tell you whether it’s being applied to you correctly.

Statutory sick pay is another statutory entitlement worked out the same way — see our statutory sick pay calculator if time off ill is part of your situation.

Common mistakes with a redundancy pay calculator

Counting service years forward instead of backward. The bands apply to your age during each year worked, not your age now. A 45-year-old with 8 years’ service worked those years at 37–44 — all in the 1× band, not the 1.5× band. (Yes, this exact error was on the old version of this page.)

Forgetting the weekly cap. Higher earners routinely overestimate by using their actual salary. If you earn £1,200 a week, the formula still uses £751.

Assuming under-2-years means nothing is owed. No statutory redundancy, true — but notice pay, holiday pay, and any contractual entitlements still stand.

Thinking the £30,000 tax-free amount is per payment. It’s per redundancy — statutory plus enhanced combined. Two separate payments from the same redundancy don’t each get £30,000.

Frequently asked questions

Does voluntary redundancy pay the same as compulsory?

Yes, the statutory minimum is calculated the same way whoever initiates it. The difference is usually the enhanced offer: employers often sweeten voluntary packages to get enough takers, so voluntary deals frequently end up more generous in practice. Use the calculator above to check your figure under either scenario.

What counts as continuous service?

Unbroken employment with the same employer (or an associated employer). Strikes, lockouts, short gaps between contracts, and internal moves do not necessarily break it. The tricky cases are agency-to-permanent transitions and dismissal followed by re-engagement. If your situation is unusual, check with ACAS rather than guessing.

I am 60 with 30 years of service. Do I get 30 years' worth?

No. Only the most recent 20 years count. At 2026/27 rates the absolute maximum is £22,530 (20 years x 1.5 x £751), and you would need all 20 of those years to have been worked at age 41 or over to reach it.

Can I be made redundant while on maternity leave or sick leave?

You can be made redundant while on leave, but the redundancy must be genuine. Pregnancy, maternity, or illness cannot be the real reason, and there are extra protections around suitable alternative employment. If the timing looks suspicious, get advice before signing anything.

What if I find a new job before my notice ends?

Your statutory redundancy pay is not affected by finding new work. It compensates you for losing the old job, not for staying unemployed. Notice pay can be a different story if you leave early, so check the terms.

Does redundancy pay affect my Universal Credit or other benefits?

Redundancy payments count as capital for means-tested benefits. A lump sum can push you over the savings thresholds (£6,000 starts reducing Universal Credit; £16,000 usually ends it). Get benefits advice before the money lands, not after.

My employer offered me a settlement agreement. Should I sign?

Do not sign without the independent legal advice your employer must pay for. Settlement agreements waive your right to take the matter to tribunal, so the advice is not a formality. A solicitor will check the money, the tax treatment, and whether the wording protects you. Compare the offer against the calculator result before you go in.

How quickly should I receive my redundancy pay?

There is no single statutory deadline, but it should be paid promptly, usually with or shortly after your final pay. If your employer is insolvent, claim through the Redundancy Payments Service as soon as possible. There is generally a 6-months-less-a-day window from when your employment ended.

Time Off Ill as Well?

Statutory sick pay is another statutory entitlement worked out from your weekly pay. See what you would get if time off ill is part of your situation.

Use the Statutory Sick Pay Calculator