How UK statutory redundancy pay is calculated (2026)

Statutory redundancy pay is for employees, not for everyone who is “on the books”. Agency workers, many casual and zero-hours arrangements, and people who are genuinely self-employed typically do not qualify. Employment status is a legal test, not a job title — if you are unsure, check GOV.UK’s employee guidance before you treat any web estimate as an entitlement.

You also need two complete years of continuous service with that employer. One year and eleven months is not enough for the statutory payment, even if the job felt permanent. Continuous service can survive some breaks (for example certain sickness or family leave) and can be broken by others. Partial years do not count: five years and ten months is five years for this formula.

Length of service is then capped at 20 complete years. Someone with 22 years still has only 20 years counted. GOV.UK lists further exceptions — including some Crown servants, members of the armed forces and police, and a domestic servant who is a member of the employer’s immediate family.

For each complete counted year you get a fraction of a week’s pay, depending on how old you were in that year: half a week for each full year you were under 22, one week for each full year you were 22 or older but under 41, and one and a half weeks for each full year you were 41 or older. Those are GOV.UK’s words. They are not a single rate based on your age today.

The official calculator — and ours — then walks backwards from your age on the relevant date (usually the last day of employment). A year only gets the higher band after a full year in that band. If you are 41 on the day the job ends, the most recent year is still one week; 1½ weeks starts at leaving-age 42. If you are 22, the most recent year is still half a week; one week starts at leaving-age 23. Citizens Advice puts it the same way: the higher rates apply only for the full years you were over 22 or 41.

That walk-back is why two people with the same salary and the same years of service can get different statutory totals, and why a birthday just before the leaving date can move the figure by half a week.

Even if you earn £1,200 a week, the statutory formula does not use £1,200. From 6 April 2026 the weekly figure is capped at £751 in England, Scotland and Wales, and at £783 in Northern Ireland. The absolute statutory maximum is then 1½ × 20 × that cap: £22,530 in Great Britain, or £23,490 in Northern Ireland — and only if every counted year sits in the 41+ band.

The cap that applies is the one in force on the date you are made redundant, not the one in force when you started the job. Caps usually move each April. If employment ends before 6 April 2026 the older, lower figures apply.

Weekly pay itself is normally your average gross pay over the 12 weeks before the day you got notice. ACAS says guaranteed overtime and contractual bonuses or commission should be included; discretionary extras often should not. If you are on family-related leave, the calculation uses your normal contractual weekly pay, not the reduced statutory rate you may have been receiving. Coronavirus furlough is still treated as if you had been on normal pay.

Age 45, 10 complete years, £600 a week, England/Scotland/Wales. Walk back through leaving-ages 45 down to 36. Four of those years sit at 42 or over (45, 44, 43, 42) → 4 × 1.5 = 6 weeks. The other six years sit at 23–41 → 6 weeks. Total 12 weeks × £600 = £7,200. A common shortcut — “I’m 45 so every year is 1½ weeks” — would have invented £9,000. The year you were 41 on the walk-back is still only one week.

Age 30, 5 complete years, £900 a week, same region. All five years sit in the 23–41 band → 5 weeks. Pay is above the £751 cap, so the formula uses £751, not £900. Statutory pay is 5 × £751 = £3,755. The uncapped figure (£4,500) is what some enhanced policies pay; it is not the statutory amount.

Age 50, 20 complete years, £1,000 a week. Twenty years is the service cap. Nine years at 1½ weeks (leaving-ages 50 down to 42) plus eleven at 1 week (41 down to 31) = 24.5 weeks × £751 = £18,399.50. That is below the £22,530 absolute maximum because not every counted year was in the 41+ band.

The years that count are measured to a relevant date, not always to the day you clear your desk. In a straightforward working-notice case that date is the last day of the notice period. If you are paid in lieu of statutory notice and stop work immediately, ACAS says the relevant date is the date employment would have ended if you had worked that statutory notice.

That can add a complete year. ACAS’s own illustration: 8 years and 11 months of service, paid in lieu of 8 weeks’ statutory notice, becomes 9 years and 1 month — so 9 years count, not 8. Contractual notice that is longer than the statutory minimum is treated differently; do not assume extra contractual weeks always move the relevant date the same way.

Our calculator asks for your age and complete years on the leaving date you type in. It does not add statutory notice for you. If you are being paid in lieu, work out the relevant date first (GOV.UK / ACAS), then enter the age and years on that date.

Many employers pay more than the statutory minimum under a policy, a union agreement or a settlement. Enhanced packages may use uncapped salary, more weeks per year, or a lump sum that has nothing to do with the age bands. None of that reduces the statutory floor for an eligible employee. Check the written terms; a verbal “we always pay a month a year” is not the calculation.

HMRC treats statutory redundancy, extra severance and some non-cash benefits you keep as a combined pot. You do not usually pay Income Tax or employee National Insurance on the first £30,000 of that pot. Statutory redundancy on its own is almost always under that line — the GB maximum is £22,530. Holiday pay, unpaid wages and post-employment notice pay (the taxable slice of pay in lieu of notice) sit outside that exemption and are taxed like earnings. Employer Class 1A National Insurance can apply to the amount over £30,000.

Salary sacrifice can change the contractual weekly wage some employers use for the statutory calculation. If your cash pay was reduced for a pension, ask which figure they will use. Model take-home on a new salary with the Income Tax calculator; do not treat the redundancy lump sum as a month of net pay.

You are not entitled to statutory redundancy pay if the employer offers to keep you on, or offers suitable alternative work which you refuse without good reason. Dismissal for misconduct is not redundancy. A short-term lay-off without pay (or on less than half a week’s pay) can, after more than four weeks in a row or more than six weeks in thirteen, let an eligible employee claim statutory redundancy — there is a strict written process and a seven-day window for the employer to reject the claim.

You have six months from the date the job ends to apply for unpaid statutory redundancy pay (an employment tribunal claim is usually six months minus one day). A claim for contractual / enhanced redundancy is often three months minus one day. Those clocks are short. Write to the employer first, keep the letter, and get advice from ACAS (Great Britain) or the Labour Relations Agency (Northern Ireland) before the deadline.

If the employer is insolvent, statutory redundancy can be claimed from the government’s Redundancy Payments Service rather than from the company. If the business has simply stopped trading without a formal insolvency, the path is different — ACAS and GOV.UK cover that split. Our calculator does not file a claim or talk to the RPS.

Collective consultation (20 or more redundancies), the right to time off to look for work, and whether a selection pool was fair are separate from the pounds-and-pence formula. So are settlement agreements, garden leave, restrictive covenants and whether a TUPE transfer preserved your continuity.

The calculator does not look up a payroll record, add statutory notice for you, or split an enhanced-plus-statutory package into tax-free and taxable slices. Annual salary ÷ 52 is only a stand-in for a true 12-week average.