Redundancy Pay Calculator
Calculate your statutory redundancy entitlement, notice pay, and tax-free allowance. See exactly what you'll receive after deductions.
Your Employment Details
Calculate your redundancy entitlement
Statutory minimum: 5 weeks (1 week per year, max 12)
Your Redundancy Package
Estimated total payment
How Statutory Redundancy Is Calculated
Key limits for 2025/26:
- • Weekly pay capped at £700
- • Maximum 20 years of service count
- • First £30,000 of redundancy pay is tax-free
- • Must have 2+ years of continuous service to qualify
Tax Treatment Summary
Tax-free: Up to £30,000 of genuine redundancy pay (statutory + ex-gratia).
Taxable: Payment in Lieu of Notice (PILON), holiday pay, any redundancy over £30,000.
NI exempt: Genuine redundancy pay (even above £30,000), but PILON is subject to NI.
Understanding Redundancy Pay
Tax-Free Elements
- ✓Statutory redundancy pay (first £30k)
- ✓Ex-gratia payments (first £30k combined)
- ✓Compensation for loss of office
Taxable Elements
- ✗Payment in Lieu of Notice (PILON)
- ✗Outstanding holiday pay
- ✗Redundancy pay over £30,000
- ✗Commission or bonus owed
Statutory Redundancy Rates 2025/26
| Age Bracket | Weeks' Pay per Year | Maximum per Year |
|---|---|---|
| Under 22 | 0.5 weeks | £350 |
| 22 to 40 | 1 week | £700 |
| 41 and over | 1.5 weeks | £1,050 |
Your Rights When Being Made Redundant
- • Consultation: Employer must consult before making redundancies
- • Notice: Statutory minimum 1 week per year (up to 12 weeks)
- • Time off: Reasonable paid time to look for work or training
- • Written statement: Right to explanation of how redundancy was calculated
- • Alternative work: Employer should offer suitable alternatives if available
Frequently Asked Questions
How is statutory redundancy pay calculated in the UK?
Statutory redundancy pay is based on age, length of service (up to 20 years), and weekly pay (capped at £700). You get: 0.5 weeks' pay for each full year under age 22, 1 week's pay for each year aged 22-40, and 1.5 weeks' pay for each year aged 41 or over.
How much redundancy pay is tax-free?
The first £30,000 of genuine redundancy pay is completely tax-free and exempt from National Insurance. This includes statutory redundancy and any additional ex-gratia payment from your employer. Amounts over £30,000 are taxed as normal income but remain NI-free.
Is notice pay taxable when made redundant?
Yes, notice pay is always taxable. If you work your notice or are on garden leave, it's taxed through normal PAYE. Payment in Lieu of Notice (PILON) is also fully taxable and subject to National Insurance contributions.
How many years of service do I need to get redundancy pay?
You must have at least 2 years of continuous service with your employer to qualify for statutory redundancy pay. Service is calculated from your start date to your redundancy date, and only complete years count.
What is the maximum statutory redundancy pay?
The maximum statutory redundancy pay is around £21,000 (20 years × 1.5 weeks × £700). This is based on the maximum 20 years of service, all at age 41+, and the weekly pay cap of £700.
Do I pay National Insurance on redundancy pay?
Genuine redundancy payments (statutory and ex-gratia) are exempt from National Insurance, even if they exceed £30,000 (though amounts over £30k are subject to Income Tax). However, notice pay (including PILON) and holiday pay are subject to both tax and NI.