Calculating your redundancy pay

How much redundancy pay you get depends on your wage, how long you have worked at the company and your age. When your employer gives you your redundancy payment they must also give you a statement showing how it was calculated.

Contractual redundancy pay

You should check your employment contract for how much redundancy pay you are entitled to. Some employers offer employees more generous packages than the statutory minimum as part of their employment benefits.

Your employer cannot offer you less than the stautory minimum through your employment contract.

Employment contracts

Statutory redundancy pay

Statutory redundancy pay is based on a calculation which uses your age and length of service. The redundancy calculator can tell you how much statutory redundancy pay you might be entitled to.

The total amount you should be paid for redundancy will be based on:

how long you have been continuously employed
your age
your weekly pay, up to a certain limit (current maximum £400)

You will get:

0.5 week's pay for each full year of service where your age was under 22
one week's pay for each full year of service where your age was 22 or above, but under 41
1.5 week's pay for each full year of service where your age was 41 or above

Example: you are under 45, your weekly pay is £400 per week and you have completed 15 years full service, you will receive £6,800 stautory redundancy pay.

Step 1: 1.5 week's x 4 years service when you were 41 or above = 6 weeks = £2,400
Step 2: 1 week x 11 years service when you were under 41 = 11 weeks = £4,400
Step 3: 6 weeks + 11 weeks = 17 weeks x £400 (max weekly wage) = £6,800

Relevant end date for your years of service

The number of weeks' redundancy pay you should receive is calculated up until a set 'relevant date'. It is important to know when this date is so you can work out how many years service you have. For example, if you started work for your employer on 1 March and you were given your redundancy notice on 15 February, you would need to calculate if your last year's service can count towards your redundancy pay.

The relevant dates can be a number of dates, but in most instances it will be the date when your employment ends (for example, the last day of your notice period). In some situations this will be different:

if your employer gave you a statutory notice period up until a set date, and then changed your notice period to finish earlier - the relevant date will be when your notice should have expired before it changed
if you are on a trial period for another position within the company and your employer lets you go because the work is not suitable - the relvant date would be when your original contract ended before the trial period with the the new position
if you are not given the stautory notice period (e.g. because of a payment in lieu arrangement) - the relevant date would be when your contract of employment would have ended if you were given the statutory notice period

Tax

Redundancy pay under £30,000 is not taxable. More information on whether elements of the payment, such as pay in lieu of notice (PILON), is taxable is available from HM Revenue and Customs. Pay in lieu of notice is money paid to you by your employer as an alternative to being given your full notice.

Payment in lieu of notice (PILON) tax information

Where to get help

If you are being denied your rights, talk to your employer first of all. If you have an employee representative (for example, a trade union official), they may be able to help. If this does not work, you may need to make a complaint using your employer's internal grievance procedure.

If you are a member of a trade union they can also provide you with advice or support.

Calculate your redundancy payment

This service allows you to calculate how much statutory redundancy you are entitled to based on your circumstances.

How to use this service

To use the service simply fill in your age and number of complete years you have worked for your current employer. The calculator will then show how much statutory redundancy pay you are entitled to.

There is also a guide that explains how the figure is calculated.