Statutory redundancy pay explained, with a worked example

Deze inhoud is in het Engels.

Statutory redundancy pay is the minimum you are entitled to when your job ends because of redundancy and you meet the eligibility rules. It is calculated from your age, your length of service and your weekly pay, with a cap on both the weekly pay and the total. This guide explains how the calculation works for 2026/27, walks through a worked example, covers the tax position and the deadline for claiming. Figures checked against GOV.UK on 15 October 2026.

Door Valtrinity. Bijgewerkt op 18 oktober 2026.

Who is eligible

To receive statutory redundancy pay you usually need two years of continuous service with your employer by the time your employment ends. Your employer should calculate the amount and pay it, usually through payroll. Some contracts or collective agreements offer more than the statutory minimum, so check your own terms as well.

Redundancy means the job has ceased or diminished, or the workplace has closed, rather than the individual being dismissed for another reason. If your situation is unclear, ask for the reason in writing.

• Usually two years of continuous service.
• Your contract may give more than the statutory minimum.
• Ask for the reason in writing if it is unclear.

How the weeks are counted

Redundancy pay is counted in weeks, using your age during each year of service. Half a week’s pay is due for each complete year you worked while under 22. One week’s pay is due for each year while aged 22 to 40. One and a half weeks is due for each year while aged 41 and over. Only the last 20 years of service count, so the maximum is 30 weeks.

The age bands apply to each year of service, counted from the date your employment ends backwards. That is why a long-serving worker can have some years counted at one rate and some at another.

• Under 22: half a week per year.
• 22 to 40: one week per year.
• 41 and over: one and a half weeks per year.
• Maximum 20 years of service, so 30 weeks at most.

The weekly pay cap

Weekly pay is the average of your gross weekly pay over the 12 weeks before notice was given, not your current pay. From 6 April 2026 the weekly pay used in the calculation is capped at £751. Before that date the cap was £719. The maximum statutory redundancy payment is therefore £22,530, which is 30 weeks at £751.

If your weekly pay is below the cap, your actual pay is used. The cap only matters for people earning more than £751 a week.

• From 6 April 2026: weekly pay capped at £751.
• Before 6 April 2026: £719.
• Maximum: £22,530.

Worked example: 10 years at £600 a week

Take an employee aged 45 with 10 years of service who earns £600 a week. Over the 10 years, the four most recent years are at ages 41 to 45, so they count at one and a half weeks each, which is 6 weeks. The earlier six years are at ages 35 to 41, which count at one week each, which is 6 weeks. The total is 12 weeks.

Twelve weeks at £600 is £7,200. The weekly pay of £600 is below the £751 cap, so the full amount applies. Pay that is exactly on a year boundary, or a year that is only part complete, can change the count, so ask your employer to show the calculation.

• Four years at 1.5 weeks: 6 weeks.
• Six years at 1 week: 6 weeks.
• 12 weeks at £600: £7,200.

Tax on redundancy pay

The first £30,000 of redundancy pay, including any amount above the statutory minimum, is exempt from income tax. Payments above £30,000 may be taxed. National Insurance rules differ, so check the detail on GOV.UK if your payment is large.

• The first £30,000 is exempt from income tax.
• Payments above £30,000 may be taxed.

Claiming, and the six-month deadline

If your employer does not pay, or pays less than you are due, you can make a claim to an employment tribunal. The claim must usually be made within six months of the date your employment ended. Acting early is sensible, because the deadline is firm and the evidence of your service and pay is easier to gather while records are current.

Keep your payslips, contract, letters about the redundancy and any notice of the decision. These are the documents you will need to check the calculation.

• Claim within six months of the end of employment.
• Keep payslips, your contract and redundancy letters.

Sources

Figures for the 2026/27 tax year, checked against the GOV.UK page below on 15 October 2026.

• GOV.UK, Redundancy pay: https://www.gov.uk/redundancy-your-rights/redundancy-pay

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