Redundancy Payment Calculator 2026

Statutory redundancy pay is based on your age, weekly pay (capped at £700 for 2025/26), and length of service (maximum 20 years). You get 0.5 weeks' pay for each year under 22, 1 week's pay for each year aged 22-40, and 1.5 weeks' pay for each year aged 41+. The calculation works backwards from your age at redundancy.

The first £30,000 of redundancy pay is tax-free. This includes statutory redundancy pay, enhanced redundancy pay, and any ex-gratia payments. Amounts over £30,000 are taxed as income. Notice pay (whether worked or paid in lieu) is always taxable and subject to National Insurance. Pension contributions from redundancy pay are not subject to the £30,000 limit.

You need at least 2 years' continuous service with the same employer to qualify for statutory redundancy pay. Service is calculated from your start date to your termination date. Breaks in service may or may not reset the clock depending on the circumstances. Some employers offer enhanced redundancy with lower qualifying periods.

Your employer must pay statutory redundancy if you qualify (2+ years' service and genuine redundancy). If they refuse, you can make a claim to an employment tribunal within 6 months. However, redundancy pay is not due if you unreasonably refuse a suitable alternative role offered by the employer. Misconduct dismissal during a redundancy process can also forfeit entitlement.

Statutory minimum notice is 1 week per year of service, up to a maximum of 12 weeks. If your contract specifies a longer notice period, the contractual period applies. Notice pay is always taxable. Your employer can pay you in lieu of notice (PILON). During your notice period, you retain all employment rights and benefits.