Calculate your redundancy pay

If you have at least two years of continuous service, you are entitled to statutory redundancy pay as a legal minimum. The amount is based on your age, weekly pay (capped at £751 from April 2026), and years of service, up to a maximum of 20 qualifying years. On top of that, you are entitled to your full notice period (or payment in lieu), any accrued holiday pay, and any other contractual entitlements. Statutory redundancy pay alone is rarely the whole picture. A solicitor can help you identify everything you are owed before you sign.

The calculation uses three factors: your weekly pay (capped at £751 in Great Britain from April 2026), your complete years of continuous service (up to 20), and your age at the time of redundancy. The multiplier is 0.5 weeks per year for service under age 22, 1 week per year aged 22 to 40, and 1.5 weeks per year aged 41 and over. ERA 1996 ss.162-163. The calculator above applies these rates automatically.

This is one of the most important questions to ask before you sign anything. Redundancy is a potentially fair reason for dismissal, but the process your employer follows must be fair too. If the selection process was not transparent, if you were not properly consulted, if the role is being advertised again shortly after, or if you suspect the real reason for your selection was something personal, a solicitor will look at whether a tribunal claim for unfair dismissal is available alongside your redundancy pay. Getting advice at this stage costs nothing and could make a significant difference to what you walk away with.

Statutory redundancy pay is the legal floor, not the final word. Many employers offer enhanced pay, and where you are signing a settlement agreement that includes waiving the right to bring tribunal claims, the total package should reflect that. If there are circumstances around your redundancy that give rise to other claims, that can affect the value of a negotiated settlement. A solicitor can advise you on whether the offer is reasonable before you commit to anything.

Statutory redundancy pay is tax-free up to £30,000 under ITEPA 2003 s.403. If your total termination payment exceeds £30,000, the excess is taxable at your marginal rate. Payment in lieu of notice (PILON) is always taxed as earnings under ITEPA 2003 s.402D, regardless of what it is called in your agreement. This distinction matters when you are working out what you will actually receive, and it is one reason the way a settlement agreement is drafted can affect your net position.

Yes, if your employer is asking you to sign a settlement agreement. Under ERA 1996 s.203, a settlement agreement is only legally valid if you have received independent legal advice from a qualified, SRA-regulated solicitor who is named in the agreement. Importantly, your employer is required to contribute to the cost of that advice, typically between £350 and £750, which in most cases covers the full fee. The advice is free to you in practice. There is no reason to sign without it.

A week's pay is your gross contractual pay for a normal working week under ERA 1996 ss.221-224. For salaried employees with fixed hours, that is your weekly rate. If your hours or pay vary, a 12-week average is used. Contractually guaranteed overtime counts. Discretionary bonuses, pension contributions, and benefits in kind do not.

If your redundancy date falls on or after 6 April 2026 and your employer has calculated your statutory pay using the old 2025 cap of £719 rather than the current £751, they have underpaid you. You can raise this in writing. If it is not resolved, an Employment Tribunal claim is available, but it must be brought within three months of the date payment was due. A solicitor can help you draft the letter or advise on next steps.