When your employer offers an enhanced redundancy package, it's essential to understand how it compares to the statutory minimum you're entitled to by law. This worked example walks through a real-world comparison to help you assess whether an offer is fair.
Profile Summary
| Age at redundancy | 44 |
| Years of service | 8 years |
| Weekly gross pay | £600 |
| Employer's offer | 2× multiplier at actual salary |
| Pay cap applies to statutory? | No (£600 < £643) |
Statutory Calculation
Working backwards from the redundancy date: 4 years at ages 41–44 are in the 41+ band (1.5× per year = 6 weeks), and 4 years at ages 37–40 are in the 22–40 band (1.0× per year = 4 weeks). Total: 10 weeks × £600 = £6,000.00.
Enhanced Package Calculation
The employer offers 2× the standard multiplier at the actual salary (no cap). Using the same year breakdown but doubling the multipliers: 4 years at 3.0× (double 1.5) and 4 years at 2.0× (double 1.0) = 12 + 8 = 20 weeks × £600 = £12,000.00.
Side-by-Side Comparison
| Item | Statutory | Enhanced |
|---|---|---|
| Total weeks | 10 | 20 |
| Weekly pay used | £600 | £600 |
| Total redundancy pay | £6,000.00 | £12,000.00 |
| Tax-free portion | £6,000.00 | £12,000.00 |
| Taxable portion | £0.00 | £0.00 |
| Difference | +£6,000.00 | |
Analysis
The enhanced package of £12,000.00 is exactly double the statutory minimum of £6,000.00 — which makes sense given the 2× multiplier. Both amounts are below the £30,000 tax-free threshold, so the entire enhanced payment would be received tax-free. The difference of £6,000.00 represents the additional compensation above the legal minimum.
Is this a good offer? That depends on your circumstances. The enhanced package represents about 5 months' gross salary — consider how long it might take you to find equivalent employment. For someone with specialist skills in demand, this might be more than adequate. For someone in a shrinking sector, it might feel tight.
Key Takeaways
- Always calculate your statutory minimum before assessing an enhanced offer — it's your floor.
- Enhanced packages often use actual salary rather than the capped amount, which benefits higher earners.
- Check the tax position — amounts over £30,000 are taxed as income.
- Consider what else is included: notice pay, outplacement support, extended benefits.
- Use our enhanced calculator mode to model different scenarios.
Frequently Asked Questions
Can I negotiate an enhanced package?
Yes. Enhanced packages are not legally prescribed — they're at the employer's discretion. If you have strong leverage (specialist skills, long service, loyalty), it's reasonable to negotiate. Having your statutory minimum calculated gives you a clear starting point.
What if the enhanced offer is less than statutory?
Your employer cannot pay you less than statutory redundancy pay. If their "enhanced" offer is actually below the statutory minimum, this is a legal issue and you should seek advice from ACAS or an employment lawyer.