UK statutory redundancy pay is calculated from three things: your age, your full years of service and your weekly pay. You get half a week’s pay for each full year you worked while under 22, one week’s pay for each full year aged 22 to 40, and one and a half weeks’ pay for each full year aged 41 or over. Only the last 20 years count, and your weekly pay is capped. If you were made redundant on or after 6 April 2026, the cap is £751 a week, so the most anyone can get is £22,530. You need at least 2 years’ service with your employer to qualify at all.
That’s the short answer. The rest of this guide walks through each rule with worked examples, so you can check the figure on your redundancy letter line by line. I built a free UK redundancy pay calculator that follows the same steps, and I tested it against the official GOV.UK calculator on 8 October 2026. Every example below uses figures that GOV.UK’s own calculator returned that day.
You’re normally entitled to statutory redundancy pay if you’re an employee and you’ve worked for your current employer for 2 years or more. GOV.UK’s guidance for employers adds that you must have been dismissed, laid off or put on short-time working. People who chose early retirement don’t qualify.
Being an employee matters. Workers on some casual contracts and self-employed contractors aren’t covered, even if they’ve done the same job for years. If you’re not sure which group you’re in, your contract and payslips are the first place to look.
There are also exceptions where you lose the right to a payment:
Some groups are excluded altogether. They include Crown servants, members of the armed forces and police services, share fishermen, former registered dock workers, apprentices who aren’t employees at the end of their training, and a domestic servant who is a member of the employer’s immediate family.
Your contract can be more generous than the law. Some employers pay enhanced redundancy after one year, or multiply the statutory figure. They can’t pay you less than the statutory amount, though, so the calculation below is your floor.
Each full year of continuous service earns a set number of weeks’ pay. The rate depends on how old you were throughout that year:
The years are counted backwards from the date you were made redundant, not forwards from your start date. This is the part that catches people out. Your most recent full year of service is the year you spent at your current age minus one. So a 41-year-old’s most recent full year was spent aged 40, and it earns 1 week, not 1.5.
Only full years count. Three years and nine months is 3 years. If you’re close to a work anniversary, that date can change the figure, but only your employer’s redundancy date counts. Agreeing a later date is a conversation to have before you sign anything.
GOV.UK sets out these bands on its statutory redundancy pay page, along with the 2-year rule and the cap.
Picture someone who turns 41 the day before they’re made redundant and has 20 years’ service. Counting back, their 20 full years were spent aged 40, 39, 38 and so on down to 21. That’s 19 years in the 22–40 band (19 × 1 = 19 weeks) and 1 year aged 21 (1 × 0.5 = 0.5 weeks). The total is 19.5 weeks. GOV.UK’s calculator gives exactly that answer for age 41 and 20 years.
Your week’s pay is the average you earned per week over the 12 weeks before the day you got your redundancy notice. It’s your gross pay, before tax and other deductions such as student loan repayments. If you were paid less than usual because you were on furlough, GOV.UK says your redundancy pay is based on what you would normally have earned.
If you’re paid monthly, a simple way to get a weekly figure is monthly pay × 12 ÷ 52. £2,600 a month works out at £600 a week. Overtime, commission and bonuses may count too, depending on your contract.
Weekly pay is capped, and the cap goes up each April. The figure that applies depends on the date you were made redundant:
The Great Britain figures for 2026 come from GOV.UK’s guidance, and the Northern Ireland figures and earlier years are the ones the GOV.UK redundancy pay calculator shows for each date. The maximum is simply 20 years × 1.5 weeks × the cap.
If you earn more than the cap, your pay above it is ignored. Someone on £900 a week and someone on £751 a week, with the same age and service, get exactly the same statutory payment.
The quickest way to understand the formula is to run some real cases. I put each of these through GOV.UK’s calculator on 8 October 2026 and through my own calculator, and the answers matched to the penny.
Priya is 50, has worked for her employer for 12 full years and earns £650 a week. She was made redundant in July 2026.
Her pay is under the £751 cap, so her full weekly pay is used.
Josh started at 18 and is now 22, earning £600 a week. All four of his full years were spent aged 18 to 21, so each one earns half a week: 4 × 0.5 = 2 weeks. His statutory redundancy pay is 2 × £600 = £1,200. It feels low, but the law deliberately weights the payment towards older workers, who tend to find new work more slowly.
Margaret’s case shows both caps at work. Only her last 20 years count, which were spent aged 59 down to 40. That’s 19 years at 1.5 weeks (28.5 weeks) plus one year aged 40 at 1 week, so 29.5 weeks. Her weekly pay is capped at £751, so she gets 29.5 × £751 = £22,154.50. In Northern Ireland the cap is £783, which gives £23,098.50.
Sam is 30 and has worked for his employer for 1 year and 11 months. He gets nothing in statutory redundancy pay, because he has only 1 full year of service. His contract might still offer a payment, and he’s still entitled to notice pay.
Two people, both 41 with 20 years’ service and both earning £2,000 a week, are made redundant a day apart. The one made redundant on 5 April 2026 gets 19.5 × £719 = £14,020.50. The one made redundant on 6 April 2026 gets 19.5 × £751 = £14,644.50. The new cap is worth £624 to them.
If you’d like to try your own numbers, the project page for my redundancy calculator explains how it works and links to the source code.
Statutory redundancy pay is only one part of what you’re owed when you leave. You also have a right to a notice period, and the statutory minimum depends on how long you’ve worked there:
Your contract can give you more notice, but never less. Your employer either pays you through your notice period or, depending on your circumstances, makes a payment in lieu of notice (often called PILON). Notice pay is based on your average weekly pay over the 12 weeks before your notice starts, and unlike redundancy pay it isn’t capped. GOV.UK explains the options in its guide to redundancy notice periods.
You should also be paid for any holiday you’ve built up but not taken. That can be a sizeable amount if you’ve saved leave for later in the year. When you leave part-way through a leave year, your yearly entitlement is pro-rated by the calendar days you were employed, and anything you haven’t used is paid out. My guide on how much holiday you’re entitled to in the UK explains that sum step by step, with GOV.UK’s worked examples.
Check your final payslip for these items as well:
If your notice period runs over a bank holiday, count the real working days you have left before you plan job interviews or a start date.
Statutory redundancy pay under £30,000 isn’t taxable. For almost everyone, the statutory amount alone sits well under that line, because the 2026 maximum is £22,530.
The other parts of your final pay are a different story. Holiday pay, unpaid wages, notice pay and company benefits such as bonuses count as earnings, so they usually go through payroll with tax and National Insurance taken off as normal. If you repay a student loan, those payments can come off too.
GOV.UK’s page on tax and National Insurance after redundancy lists what can be included in a termination payment. If your employer offers an enhanced package that takes the total over £30,000, it’s worth getting advice on how the excess is taxed before you agree to it.
You have 6 months from the date your job ends to apply for statutory redundancy pay. Your employer should pay it when they dismiss you or soon after, and give you a written statement showing the amount and how they worked it out. Ask for that statement if it’s missing, because it makes checking the figure much easier.
If your employer doesn’t pay, or you disagree with the amount, you can make a claim to an employment tribunal within that 6-month window. Before a tribunal claim you must contact Acas, which offers free early conciliation and often settles disputes without a hearing.
You can claim statutory redundancy pay without being formally dismissed if you’ve been laid off (with no pay, or less than half a week’s pay) for:
You have to write to your employer saying you intend to claim, within 4 weeks of your last non-working day in that period. If they don’t reject your claim within 7 days, you write again giving your notice. Your claim can be rejected if normal work is likely to restart within 4 weeks and last at least 13 weeks.
When a business goes bust, the Insolvency Service’s Redundancy Payments Service can pay statutory redundancy pay and some other money you’re owed. GOV.UK’s guide to how those payments are worked out explains the limits. It pays holiday pay for up to 6 weeks, arrears of pay for up to 8 weeks and notice compensation for up to 12 weeks. It doesn’t tax your redundancy payment, but it does deduct tax and National Insurance from the other elements.
Most errors come from a handful of misunderstandings. Run through these before you accept a figure.
It depends on your age during each full year of service: half a week for each year under 22, one week for each year from 22 to 40, and one and a half weeks for each year at 41 or older. Only your last 20 years count.
For redundancies on or after 6 April 2026, the maximum is £22,530 in England, Scotland and Wales and £23,490 in Northern Ireland. That’s 20 years at 1.5 weeks’ pay, using the capped weekly pay.
Gross pay. Your week’s pay is your average earnings before tax and other deductions over the 12 weeks before you got your redundancy notice, capped at £751 a week from 6 April 2026.
Not under the law. You need at least 2 years’ continuous service as an employee. Your contract may still give you a redundancy payment, and you’re still entitled to notice pay and any untaken holiday.
Statutory redundancy pay under £30,000 isn’t taxable. Notice pay, holiday pay, unpaid wages and bonuses in your final pay are normally taxed as earnings.
They should pay it when they dismiss you or soon after, with a written statement of how they worked it out. If they don’t, you have 6 months from the date your job ended to claim, including through an employment tribunal.
The method is the same, but the weekly cap is higher. From 6 April 2026 it’s £783 in Northern Ireland, compared with £751 in Great Britain, so the maximum payment is £23,490.
Redundancy is stressful, and the numbers on the letter can look arbitrary. They aren’t. Every statutory payment comes from the same formula: weeks per year by age, the 20-year limit and the weekly cap for your date. Put your details into the redundancy pay calculator linked at the top of this guide to see the breakdown year by year, and compare it with the written statement your employer gives you. If they don’t match, ask your employer how they worked it out. If you still can’t resolve it, Acas gives free, impartial advice on redundancy and can help before a tribunal claim.
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