How statutory redundancy pay is worked out
If you're an employee and you've worked for your employer for at least two years, you're normally entitled to statutory redundancy pay. It's based on three things: your age during each year you worked there, how many full years you've worked (up to 20), and your weekly pay (up to a cap).
For each full year of service you get:
| Your age during that year | Redundancy pay for each year |
|---|---|
| Under 22 | Half a week's pay |
| 22 to 40 | One week's pay |
| 41 or older | One and a half weeks' pay |
The calculator counts back from the date your job ends, so your most recent years are counted first. A year only gets the higher rate if you were that age for the whole of that year.
Redundancy pay limits from 6 April 2026
- England, Scotland and Wales: weekly pay is capped at £751, so the most you can get is 20 × 1.5 × £751 = £22,530.
- Northern Ireland: the cap is £783 a week, making the maximum £23,490.
These limits apply if your redundancy date is on or after 6 April 2026. The previous caps were £719 in GB and £749 in Northern Ireland. "Weekly pay" means your gross pay before tax. If your hours or pay vary, it's the average over the 12 weeks before you were given notice.
Worked example: age 45, 10 years, £600 a week
Counting back from your redundancy date, you were 41 or older for the last 4 years and between 22 and 40 for the 6 years before that.
- 4 years × 1.5 weeks = 6 weeks
- 6 years × 1 week = 6 weeks
- Total: 12 weeks × £600 = £7,200
If the same person earned £900 a week, only £751 would count, giving 12 × £751 = £9,012. A 30-year-old with 12 years' service on £500 a week gets 8 weeks for the years aged 22 to 29 and 2 weeks for the 4 years aged 18 to 21: 10 weeks × £500 = £5,000.
Who can't get statutory redundancy pay
- Workers who aren't employees, such as agency workers, freelancers and most zero-hours "workers".
- Employees with less than two years of continuous service.
- Employees who unreasonably turn down suitable alternative work offered by their employer.
- Some other groups, including police officers, members of the armed forces and share fishermen.
If your employer has gone bust and can't pay, you can apply to the government's Redundancy Payments Service.
Tax on redundancy pay
Statutory and enhanced redundancy pay is tax-free up to £30,000 in total. Anything above that is taxed as income. Pay in lieu of notice, holiday pay and wages you're owed are taxed normally, so they don't count towards the £30,000. Your employer should pay you for any holiday you've built up and not taken; see the holiday entitlement calculator.
Tips
- Check your contract and staff handbook. Many employers pay enhanced redundancy, such as a full week's pay per year with no cap.
- Your notice period is separate. You're entitled to at least one week's notice for each full year of service, up to 12 weeks.
- Ask whether part of the payment can be paid straight into your pension as an employer contribution. It can save tax, especially on any amount above £30,000. Our pension calculator shows how a lump sum could grow.
- Before you sign a settlement agreement, get independent legal advice. Your employer usually pays for it.
Frequently asked questions
How much redundancy pay will I get after 5 years?
If you were 22 to 40 throughout those 5 years, you get 5 weeks' pay. On £600 a week that's £3,000. If you were 41 or older for all 5 years, it's 7.5 weeks' pay, or £4,500.
What is the maximum statutory redundancy pay in 2026?
For redundancies on or after 6 April 2026 the maximum is £22,530 in England, Scotland and Wales (20 years × 1.5 weeks × £751) and £23,490 in Northern Ireland, where the weekly cap is £783.
Is redundancy pay taxed?
The first £30,000 of redundancy pay is tax-free. Pay in lieu of notice, holiday pay and unpaid wages are taxed as normal earnings.
Do I get redundancy pay if I've worked less than 2 years?
Not statutory redundancy pay. You need at least two years of continuous employment. Your contract might offer a payment, and you're still entitled to your notice pay and any holiday pay owed.
What weekly pay is used for redundancy?
Your gross weekly pay, before tax, capped at £751 in GB or £783 in Northern Ireland from 6 April 2026. If your pay varies, your employer uses the average over the 12 weeks before you got your notice.
Last reviewed October 2026 using 2026/27 figures. This calculator gives an estimate for guidance only.