Frequently Asked Questions
Common questions about UK redundancy pay, eligibility, and using our calculator.
How is statutory redundancy pay calculated?
It's based on your age during each year of service, your weekly gross pay (capped at £643 for 2025/26), and the number of complete years you've worked. Under 22: 0.5 weeks per year. Ages 22–40: 1.0 week per year. Age 41+: 1.5 weeks per year. Maximum 20 years counted.
Am I eligible for statutory redundancy pay?
You need at least 2 years' continuous employment with the same employer to qualify. You must be an employee (not self-employed) and the redundancy must be genuine — meaning your employer needs fewer workers, is closing, or is closing your workplace.
Is redundancy pay taxable?
The first £30,000 of redundancy pay is tax-free. Amounts above £30,000 are taxed as income through PAYE. Statutory redundancy pay is also exempt from National Insurance contributions. Note that final salary, holiday pay, and pay in lieu of notice are always taxed as normal earnings.
What is the weekly pay cap?
For the 2025/26 tax year, the statutory weekly pay cap is £643. If your actual weekly pay is higher, the calculation uses £643. The cap is reviewed annually by the government.
What's the maximum statutory redundancy pay I can receive?
The maximum is 30 weeks' pay at the £643 cap = £19,290. This requires 20 years of service, all at age 41+. This amount is below the £30,000 tax-free threshold, so maximum statutory redundancy pay is always entirely tax-free.
What's the difference between statutory and enhanced redundancy?
Statutory redundancy is the legal minimum your employer must pay. Enhanced redundancy is anything above this — a higher multiplier, actual salary instead of the capped amount, or a fixed lump sum. Enhanced packages are at the employer's discretion and are common in voluntary redundancy situations.
How long is my notice period?
Statutory notice is 1 week per complete year of service, with a minimum of 1 week and a maximum of 12 weeks. Your contract may specify a longer notice period — you're entitled to whichever is greater. Use our calculator's Notice Period mode to check.
Is my data private when using this calculator?
Yes, completely. All calculations happen in your browser using JavaScript. Your salary, dates, and personal details are never sent to our servers or any third party. If you use the save feature, data is stored only in your browser's local storage on your device.
Is this legal advice?
No. This calculator and the accompanying guides provide general information based on published statutory rates. They are not a substitute for professional legal or financial advice. If you're facing redundancy and need specific guidance, consider contacting ACAS (free), Citizens Advice, or a qualified employment lawyer.
How accurate is this calculator?
The calculator uses the official 2025/26 statutory rates published by the UK government. It applies the same formula used by ACAS and gov.uk. However, individual circumstances (breaks in service, TUPE transfers, contractual terms) may affect your actual entitlement. The results should be treated as estimates.
When was the calculator last updated?
The calculator was last updated for the 2025/26 tax year with a weekly pay cap of £643. We update rates at the start of each tax year when new figures are published by the government.
Can I export my results?
Yes. After calculating your results, click the 'Export as PDF' button to download a professional PDF document containing your inputs, year-by-year breakdown, total entitlement, and tax treatment. The PDF is print-friendly and includes a timestamp.
How do I report an error or suggest an improvement?
Please use our contact form to let us know about any errors or suggestions. Select 'Report a bug or error' from the subject dropdown. We review all reports and aim to respond within a few working days.
Still Have Questions?
Get in touch or try our calculator for a personalised result.
What to Do If You Think You've Been Unfairly Made Redundant
If you believe your redundancy was not genuine — for example, if your role continues to exist, or if the selection process seemed unfair or discriminatory — you may have a claim for unfair dismissal. To qualify for this claim, you typically need at least two years of continuous service (with some exceptions, such as automatic unfair dismissal cases like pregnancy or whistleblowing). It’s important to act quickly: you usually have three months less one day from your last day of employment to submit a claim to an employment tribunal. Before doing so, ACAS offers a free early conciliation service, which often helps resolve disputes without going to a full hearing. Keep any relevant documentation — redundancy letters, emails, meeting notes — as evidence, and consider seeking advice from a trade union representative or employment law specialist if your situation is complex.
Redundancy Pay vs. Pay in Lieu of Notice (PILON)
It’s important to distinguish between redundancy pay and any pay in lieu of notice (PILON) you may receive. Redundancy pay is compensation for losing your job due to genuine redundancy, while PILON is payment for the notice period you were contractually or statutorily entitled to but didn’t work. PILON is always taxable and subject to National Insurance, regardless of whether it’s contractual or statutory. Some employment contracts include a PILON clause — if yours does, your employer can terminate your employment immediately upon payment of the notice period salary. If there’s no such clause, you’re entitled to work your notice or receive pay in lieu only if your employer follows statutory rules. Be aware that if your contract is silent on PILON and your employer imposes it without agreement, it may constitute a breach of contract. Always check your contract and ask for clarification if your final payslip separates these elements.
How Redundancy Affects Benefits and Tax Credits
Receiving redundancy pay can impact your eligibility for certain means-tested benefits and tax credits. While the first £30,000 of redundancy pay is tax-free, it may still be counted as capital when assessing eligibility for Universal Credit, Housing Benefit, or Council Tax Support. If your total savings (including the redundancy payment) exceed £6,000, your Universal Credit award may be reduced; above £16,000, you usually won’t qualify. However, redundancy payments are generally not counted as income for benefit calculations — only as capital — and some payments (e.g., statutory redundancy pay) may be disregarded for 26 weeks under certain circumstances. If you're unsure, contact Jobcentre Plus or use the Citizens Advice benefit calculator. Planning ahead — for example, using part of the payout to pay off high-interest debt or home repairs — can help maximise the long-term value of your redundancy package.