Redundancy Pay Calculator

For each full year of service, you get:

• 0.5 week's pay for each year you were under 22.
• 1 week's pay for each year you were 22 to 40.
• 1.5 weeks' pay for each year you were 41 or older.

Only the last 20 years of service count, and your weekly pay is capped at £719 (from 6 April 2025).

You need at least two years' continuous service with the same employer and must be an employee (not a contractor or most agency workers). You qualify if your role is genuinely redundant, the work has stopped or diminished, not if you're dismissed for conduct or resign.

Statutory and enhanced redundancy pay is free of tax and National Insurance up to £30,000. Anything above that is taxed as earnings through PAYE. Payments in lieu of notice (PILON) are always taxable, even within the £30,000 band.

At 45 with 12 years' service, the most recent years fall in the 41+ band (1.5 weeks each) and earlier years in the 22 to 40 band (1 week each). Weekly pay of £600 is within the £719 cap. The calculator walks back year by year, totalling the weeks and multiplying by £600 to give the statutory entitlement, all tax-free as it's well under £30,000.

• Confusing redundancy with notice pay. They are separate, you get both statutory redundancy and statutory notice pay.
• Forgetting the 20-year cap. Service beyond 20 years does not increase statutory redundancy pay.
• Assuming high earners get full pay. Weekly pay is capped at £719 for the statutory calculation, regardless of actual salary.
• Not checking for enhanced terms. Many contracts offer enhanced redundancy above the statutory minimum, read your contract and any collective agreement.