UK Redundancy Pay Calculator

Calculate your statutory redundancy pay based on current UK government rates

£0

How Redundancy Pay Works in the UK

Statutory redundancy pay is a legal entitlement for employees who have been continuously employed for at least 2 years and are being made redundant through no fault of their own. The amount you receive depends on your age, length of service, and weekly pay.

Key Point: Your weekly pay is capped at £643 (as of April 2024) for statutory redundancy calculations, regardless of your actual earnings.

Redundancy Pay Rates

  • Under 22 years: 0.5 weeks’ pay for each complete year of service
  • 22 to 40 years: 1 week’s pay for each complete year of service
  • 41 years and over: 1.5 weeks’ pay for each complete year of service

The maximum number of years that count towards your redundancy pay is 20 years, and the maximum statutory redundancy pay you can receive is £19,290.

Who Qualifies for Redundancy Pay?

To qualify for statutory redundancy pay, you must meet all of these conditions:

  • Be an employee (not self-employed)
  • Have worked continuously for your employer for at least 2 years
  • Be made redundant (not dismissed for other reasons)
  • Not have turned down suitable alternative employment
Important: Some employees may be entitled to enhanced redundancy packages that exceed statutory minimums. Check your employment contract or speak with HR about your company’s redundancy policy.

Notice Pay and Redundancy

In addition to redundancy pay, you may also be entitled to notice pay. Your employer must give you the minimum statutory notice period or pay you in lieu of notice:

  • 1 month to 2 years’ service: 1 week’s notice
  • 2+ years’ service: 1 week’s notice for each complete year, up to a maximum of 12 weeks

Some employment contracts provide for longer notice periods than the statutory minimum.

Frequently Asked Questions

Is redundancy pay taxable?
The first £30,000 of redundancy payment is usually tax-free. Any amount above this threshold is subject to income tax and National Insurance contributions.
What if I’m offered alternative employment?
If you’re offered suitable alternative employment and unreasonably refuse it, you may lose your right to redundancy pay. The job must be suitable in terms of capacity, location, and terms.
When should I receive my redundancy pay?
Your employer should pay your redundancy payment on your last day of work or shortly after. If they don’t pay, you can make a claim to an employment tribunal within 6 months.
What if my employer can’t afford to pay?
If your employer is insolvent, you can claim redundancy pay from the government’s Redundancy Payments Service. This covers statutory redundancy pay up to the legal limits.
Can I negotiate my redundancy package?
Yes, you can often negotiate enhanced terms, especially if you have valuable skills or long service. Consider factors like extended notice periods, outplacement support, or additional compensation.

Steps to Take When Facing Redundancy

  1. Check the consultation process: Your employer must consult with you before making you redundant
  2. Review your contract: Check for enhanced redundancy terms or longer notice periods
  3. Consider alternative roles: Your employer should offer suitable alternative employment if available
  4. Calculate your entitlements: Work out your redundancy pay, notice pay, and any other benefits
  5. Seek advice: Contact ACAS, a trade union, or employment lawyer if you need guidance
  6. Plan financially: Consider how redundancy will affect your finances and benefit entitlements

References

GOV.UK. (2024). Calculate your redundancy pay. Available at: https://www.gov.uk/calculate-your-redundancy-pay
GOV.UK. (2024). Redundancy: your rights. Available at: https://www.gov.uk/redundant-your-rights
MoneyHelper. (2024). Redundancy pay calculator. Available at: https://www.moneyhelper.org.uk/en/work/losing-your-job/redundancy-pay-calculator
Advisory, Conciliation and Arbitration Service (ACAS). (2024). Redundancy and other dismissals. Available at: https://www.acas.org.uk/redundancy
HM Revenue and Customs. (2024). Tax on termination payments. Available at: https://www.gov.uk/tax-on-termination-payments

Related Posts

Scroll to Top