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 statutory minimum through your employment contract.
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 £470)
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
The maximum number of years that can be taken into account is 20 years. You can't be given statutory redundancy pay for more than 20 years' employment.
If you are 45, your weekly pay is £470 per week and you have completed 15 years full service, you will receive £7,990 statutory redundancy pay.
1.5 week's x 4 years service when you were 41 or above = 6 weeks
1 week x 11 years service when you were under 41 = 11 weeks
6 weeks + 11 weeks = 17 weeks x £470 (max weekly wage) = £7,990
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.
The 'relevant date' 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 relevant date would be when your original contract ended before the trial period with the new position
- if you do not have a statutory notice period (for example because of a payment in lieu arrangement) - the relevant date would be when your employment contract would have ended if you had a statutory notice period
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.
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.
The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland. You can contact the LRA on 028 9032 1442 from 9.00 am to 5.00 pm Monday to Friday
Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.