This worked example shows how statutory redundancy pay is calculated for a mid-career employee in their 30s. We'll walk through each step of the calculation so you can understand exactly where the numbers come from and apply the same logic to your own situation.
Profile Summary
| Age at redundancy | 35 |
| Years of service | 10 years |
| Weekly gross pay | £500 |
| Pay cap applies? | No (£500 < £643 cap) |
| Eligible? | Yes (10 years ≥ 2 years minimum) |
Step-by-Step Calculation
At age 35, all 10 years of service fall within the 22–40 age band, which carries a multiplier of 1.0 week per year. This makes the calculation straightforward — there are no mixed age bands to account for.
The weekly pay of £500 is below the 2025/26 statutory cap of £643, so the full £500 is used in the calculation. The formula is: years of service × multiplier × weekly pay = total statutory redundancy pay.
Year-by-Year Breakdown
| Year | Age | Band | Multiplier | Amount |
|---|---|---|---|---|
| 1 | 26 | 22–40 | 1.0× | £500.00 |
| 2 | 27 | 22–40 | 1.0× | £500.00 |
| 3 | 28 | 22–40 | 1.0× | £500.00 |
| 4 | 29 | 22–40 | 1.0× | £500.00 |
| 5 | 30 | 22–40 | 1.0× | £500.00 |
| 6 | 31 | 22–40 | 1.0× | £500.00 |
| 7 | 32 | 22–40 | 1.0× | £500.00 |
| 8 | 33 | 22–40 | 1.0× | £500.00 |
| 9 | 34 | 22–40 | 1.0× | £500.00 |
| 10 | 35 | 22–40 | 1.0× | £500.00 |
| Total (10 weeks × £500) | £5,000.00 | |||
Tax Treatment
The total statutory redundancy pay of £5,000 is well below the £30,000 tax-free threshold. This means the entire amount is received tax-free — no income tax and no National Insurance contributions. The statutory notice period for 10 years of service is 10 weeks. Any pay in lieu of notice is separate and will be taxed as normal earnings.
Key Takeaways
- At age 35 with 10 years' service, the calculation is straightforward because all years fall in the same age band (22–40).
- Earning £500/week means the pay cap doesn't reduce your entitlement.
- £5,000 is entirely tax-free.
- If your employer offers enhanced redundancy, use our enhanced mode calculator to compare.
- Your statutory notice period is 10 weeks — check your contract for any longer contractual notice.
Frequently Asked Questions
What if I'd been earning above the weekly pay cap?
The calculation would use £643 instead of your actual pay. At 10 weeks, this gives a maximum of £6,430.00. Your employer could still use your actual salary for an enhanced package.
Would more years of service change the multiplier?
Not at age 35 — the multiplier remains 1.0× for ages 22–40. However, if you were to continue working past 41, those later years would be calculated at 1.5× per year.