Key facts
- Weekly pay used in the calculation is capped at £751 for redundancies on or after 6 April 2026
- Maximum statutory redundancy pay is £22,530, based on 20 years at 1.5 weeks per year
- You need at least two years of continuous service to qualify for statutory redundancy pay
- Statutory redundancy pay is tax free, and the first £30,000 of a wider package is also tax free
Redundancy pay is tax free up to £30,000, unlike your normal earnings explained in income tax bands guide and how to read your payslip guide.
| Age and service | Weeks due | Statutory redundancy pay |
|---|---|---|
| 30 years old, 8 full years | 8 weeks | £6,008 |
| 45 years old, 10 full years (all aged 41+) | 15 weeks | £11,265 |
| 55 years old, 20 full years (all aged 41+) | 30 weeks, capped at maximum | £22,530 |
Weekly pay capped at £751, service capped at 20 years, total capped at £22,530. Source: GOV.UK, redundancies on or after 6 April 2026.
These are the rates for redundancies on or after 6 April 2026. The weekly pay used in the calculation is capped at £751, even if you earn more, and only your first 20 years of service count. That puts the most statutory redundancy pay anyone can receive at £22,530. Statutory redundancy pay is also free of income tax and National Insurance.
If you are between jobs, see how a buffer protects you in emergency fund guide.
Who Qualifies for Statutory Redundancy Pay?
To qualify for statutory redundancy pay, you must:
- Be an employee (not a worker or self-employed contractor)
- Have been continuously employed for at least 2 years
- Have been genuinely made redundant
Agency workers, freelancers, and self-employed individuals do not qualify for statutory redundancy pay. Zero-hours contract workers who are employees (not workers) may qualify if they meet the 2-year service threshold.
How Is Statutory Redundancy Pay Calculated?
Statutory redundancy pay is calculated using a formula based on three factors:
- Age band: Half a week's pay per year of service under age 22; one week's pay per year aged 22 to 40; one and a half weeks' pay per year aged 41 and over
- Years of service: Maximum of 20 years counts
- Weekly pay: Capped at £751 per week for redundancies on or after 6 April 2026
| Age Band at Time of Redundancy | Weeks' Pay Per Year of Service |
|---|---|
| Under 22 | 0.5 weeks' pay |
| 22 to 40 | 1 week's pay |
| 41 and over | 1.5 weeks' pay |
The maximum statutory redundancy payment for redundancies on or after 6 April 2026 is therefore: 20 years x 1.5 weeks x £751 = £22,530.
Worked Example
You are 45, have worked for the same employer for 10 full years (all aged 41 or over), and earn £900 per week. Your weekly pay is capped at £751. Calculation: 10 years x 1.5 weeks = 15 weeks x £751 = £11,265 statutory redundancy pay.Redundancy Pay Calculator
Enter your age, years of service, and weekly pay to get your exact statutory redundancy entitlement.
The Weekly Pay Cap
The weekly pay cap increases each April. For reference:
| Tax Year | Weekly Pay Cap | Maximum Redundancy Pay |
|---|---|---|
| 2022/23 | £571 | £17,130 |
| 2023/24 | £643 | £19,290 |
| 2024/25 | £643 | £19,290 |
| 2026/27 (on or after 6 April 2026) | £751 | £22,530 |
The cap only applies to the statutory calculation. If your employer offers enhanced redundancy pay, your actual weekly pay may be used in full.
Is Redundancy Pay Taxable?
The first £30,000 of redundancy pay is tax-free, whether statutory or enhanced. This applies to genuine redundancy payments, not to holiday pay, payment in lieu of notice (PILON), or non-contractual bonuses paid at the same time.
Tax Planning on Redundancy
If your redundancy payment could exceed £30,000, consider whether any amount above £30,000 could be paid into your pension instead. Employer pension contributions in lieu of redundancy are not subject to income tax or NI, making this a highly tax-efficient option.Notice Pay and Holiday Pay
Redundancy pay is separate from your notice pay and any accrued but untaken holiday pay. You are entitled to:
- Statutory minimum notice: 1 week per year of service (up to 12 weeks, after 1 year's service). Your contract may give you a longer notice period.
- Accrued holiday pay: All unused holiday for the current leave year must be paid at your full pay rate.
- PILON (Pay In Lieu Of Notice): If your employer wants you to leave immediately, they can pay you in lieu of your notice period. This is taxable in full (no £30,000 exemption applies to PILON).
Other Redundancy Rights
Beyond the financial calculation, employees have important rights during a redundancy process:
- Consultation: Employers must consult with affected employees before making redundancies. For 20+ redundancies, collective consultation rules apply (minimum 30-day consultation period).
- Alternative employment: Employers must consider suitable alternative roles before making you redundant. You can trial an alternative role for 4 weeks and still claim redundancy if it's unsuitable.
- Time off to job search: You are entitled to reasonable paid time off during your notice period to look for new work or arrange training.
- No unfair selection: Selection criteria must be objective and non-discriminatory. Using protected characteristics (age, sex, pregnancy, disability etc.) as selection criteria is unlawful.
What If You Dispute Your Redundancy Pay?
If your employer hasn't paid you the correct statutory redundancy pay, or refuses to pay at all, you have several options:
- Raise a formal grievance with your employer first
- Contact ACAS (0300 123 1100) for free early conciliation
- Make a claim to an Employment Tribunal within 6 months of the redundancy
- If your employer is insolvent, claim through the Redundancy Payments Service (gov.uk)
Related Calculators
Frequently Asked Questions
It is based on your age, full years of service and weekly pay. You get half a week's pay for each full year worked under 22, one week for each year aged 22 to 40, and one and a half weeks for each year aged 41 or over. Weekly pay is capped at £751 and service at 20 years.
For redundancies on or after 6 April 2026, weekly pay used in the calculation is capped at £751 and the maximum total is £22,530. For example, someone aged 45 with 10 full years of service receives 15 weeks of pay, which is £11,265 at the capped weekly rate.
The maximum statutory redundancy pay is £22,530 for redundancies on or after 6 April 2026. This reflects the £751 weekly cap, a maximum of 20 years of service and one and a half weeks per year, giving up to 30 weeks of capped pay. Your employer can choose to pay more than the statutory minimum.
Statutory redundancy pay is free of income tax and National Insurance. More broadly, the first £30,000 of a redundancy package, including statutory and most non-statutory payments, is tax free. Anything above £30,000, and amounts that are really pay such as unpaid wages or holiday, are taxed normally.
You usually need at least two full years of continuous service with your employer to qualify for statutory redundancy pay. Below two years there is no statutory entitlement, although your contract or employer may still offer a payment. Only complete years count towards the calculation.
It depends on your age across each year of service. The most you can earn is one and a half weeks per year for years worked at 41 or over, up to 20 years, so 30 weeks at most. A 55-year-old with 20 qualifying years reaches that 30-week maximum, capped at £22,530.
Only up to the weekly cap. The calculation uses your gross weekly pay, but no more than £751 a week even if you earn more. So two colleagues with the same age and service receive the same statutory amount once both are above the cap, regardless of their actual salaries.
No. Redundancy pay compensates you for losing your job, while notice pay covers your contractual notice period and is taxed as normal earnings. You can receive both. Only the redundancy element benefits from the £30,000 tax-free treatment, not the notice pay or any unpaid wages.
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James Hartley is a CIMA qualified financial analyst and Founder and Lead Financial Analyst at WhatsUK, with 8+ years in UK tax, payroll, and compliance. He builds every calculator on WhatsUK and authors all editorial content, ensuring every figure is verified against official HMRC sources before publication.
Sources & Official References
- GOV.UK - Statutory Redundancy Pay- Official HMRC rates and eligibility criteria
- GOV.UK - Redundancy Pay Cap 2026/27- £751 weekly pay cap from 6 April 2026
- ACAS - Redundancy- Employee rights and employer obligations during redundancy
- HMRC - Tax on Redundancy Payments- £30,000 tax-free threshold and treatment of PILON
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Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.