Redundancy Pay Calculator 2026/27
If made redundant after at least 2 years of continuous employment, you're entitled to Statutory Redundancy Pay regardless of your employer's financial situation. The formula: 0.5 weeks' pay per year under age 22, 1 week aged 22–40, and 1.5 weeks per year aged 41+. Weekly pay is capped at £751 and service capped at 20 years.
Statutory Redundancy Pay is tax-free up to £30,000. Any total package above this threshold is taxable as income.
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Redundancy Pay Calculator: Know Your Rights and Entitlement
Being made redundant is stressful, but understanding your financial entitlement provides some security. This calculator works out your statutory redundancy pay based on your age, length of service, and weekly pay. Many employers also offer enhanced redundancy packages above the legal minimum.
Who qualifies for statutory redundancy pay?
You must have been employed continuously for at least 2 full years to qualify for statutory redundancy pay. You must also be an employee — self-employed people, agency workers, and short-term contractors do not qualify. However, casual workers and zero-hours contract staff may qualify if they have 2 years of continuous service.
You do not qualify if you are dismissed for misconduct, if you resign voluntarily, or if your employer offers you suitable alternative work and you unreasonably refuse it. Part-time workers are entitled to the same calculation pro-rata. The maximum statutory redundancy pay is capped at 20 years of service and a weekly pay ceiling of £751 (for 2026/27), meaning the maximum payout is £22,530.
Is redundancy pay taxable?
The first £30,000 of redundancy pay is completely tax-free. This applies to both statutory and enhanced redundancy payments. Amounts above £30,000 are taxed as employment income. However, notice pay, holiday pay, and payment in lieu of notice (PILON) are always taxable — they are not part of the £30,000 tax-free allowance.
If you receive an enhanced package above £30,000, consider asking your employer to pay the excess into your pension scheme. This can be done through a "redundancy sacrifice" arrangement and saves you Income Tax and National Insurance on the amount above £30,000.
Who Qualifies for Statutory Redundancy Pay?
You must be an employee (not a worker or self-employed contractor) and have worked for your employer for at least 2 full years (730 days) to qualify for statutory redundancy pay.
- You qualify if: You're made redundant, your fixed-term contract of 2+ years isn't renewed, you're laid off or put on short-time working for 4+ consecutive weeks (or 6+ weeks in 13 weeks).
- You do NOT qualify if: You're dismissed for misconduct, you resign voluntarily, you refuse suitable alternative employment without good reason, or you're on a fixed-term contract of less than 2 years that isn't renewed.
Part-time employees qualify equally — the calculation uses your actual weekly pay and years of service, regardless of hours.
How Statutory Redundancy Is Calculated
For each full year of service (counting backwards from your dismissal date), you receive:
| Age During That Year | Weeks' Pay Per Year |
|---|---|
| Under 22 | 0.5 weeks |
| 22 to 40 | 1.0 week |
| 41 and over | 1.5 weeks |
Your gross weekly pay is capped at £751 for 2026/27, and only 20 years of service count towards statutory redundancy.
You're 45 with 15 years' service and earn £800/week. Your statutory pay is calculated on £751 (the cap, since your pay exceeds it). Working backwards from age 45, you were aged 41–44 for 4 of those years (1.5 weeks' pay each = 6 weeks) and aged 30–40 for the remaining 11 years (1 week's pay each = 11 weeks). Total: 17 weeks × £751 = £12,767.
Tax on Redundancy Pay
The first £30,000 of your total redundancy payment is completely tax-free and National Insurance-free.
- Statutory redundancy is always tax-free up to the £30,000 limit.
- Enhanced redundancy (extra weeks above statutory) also counts towards the £30,000 tax-free limit.
- Ex gratia payments (non-contractual lump sums) also use the £30,000 allowance.
- Notice pay and holiday pay are taxable as normal earnings through PAYE.
- PILON (Pay in Lieu of Notice) is taxable if your contract allows it. If not contractual, it may be treated as taxable earnings.
Notice Period Rights
Your employer must give you a minimum notice period before your employment ends, or pay you in lieu:
| Service Length | Minimum Notice |
|---|---|
| 1 month to 2 years | 1 week |
| 2 years to 12 years | 1 week per year |
| 12+ years | 12 weeks (maximum) |
Your employment contract may give you more than the statutory minimum. If your employer makes you redundant without proper notice, you may have a claim for wrongful dismissal.
Frequently Asked Questions
What is the maximum statutory redundancy pay?
Can I negotiate more than statutory redundancy?
Does redundancy pay affect Universal Credit?
What if my employer can't afford to pay redundancy?
When should I receive my redundancy pay?
Sources & Methodology
- Gov.uk: Calculate Your Redundancy Pay
- Gov.uk: Redundancy — Your Rights
- Gov.uk: Employer Insolvency Rights
All calculations are verified against official HMRC thresholds and rates for the 2026/27 tax year. Figures are updated within 24 hours of any HMRC announcement. Calculations are for guidance only — consult a qualified accountant for personalised advice.