UK redundancy pay calculator

What this calculator does

Being told your role is at risk is disorienting, and the first practical question is almost always the same: how much am I actually going to get?

This calculator works out your statutory redundancy pay — the legal minimum your employer must pay, based on your age, your length of service and your weekly pay. It shows the working, because the calculation is genuinely counter-intuitive and a figure without an explanation is hard to check.

Using it

Your age when you are made redundant

Your age on the date your employment ends. It matters more than people expect, because the calculation walks backwards through your service year by year and applies the rate for how old you were during each one.

Complete years of service

Whole years of continuous employment with this employer. Part years do not count — four years and ten months is four years. Being TUPE-transferred to a new owner, or changing role internally, does not reset the clock.

Gross weekly pay

Your average weekly pay, before tax, over the twelve weeks before you received your redundancy notice. If your pay varies — shift premiums, commission, regular overtime — use the average across those twelve weeks rather than a typical week.

The calculation caps this figure at £751 however much you actually earn, which is covered below.

Whether you qualify

Statutory redundancy pay requires two complete years of continuous service as an employee, and you must genuinely be redundant — meaning your job is disappearing, not that you are being dismissed for another reason.

Under two years there is no statutory redundancy pay. You are still owed your notice and any holiday you have built up, and those are not small amounts.

Being on maternity, adoption, shared parental or sick leave does not remove your entitlement. You can be made redundant while on leave, but you cannot be selected because of it — that would be discrimination. Employees on maternity, adoption or shared parental leave also have a priority right to any suitable alternative vacancy.

The age bands, applied backwards

Three rates apply, depending on your age during each year of service:

• Years worked aged 41 and over — 1.5 weeks' pay each
• Years worked aged 22 to 40 — 1 week's pay each
• Years worked under 22 — 0.5 week's pay each

Here is the part that most calculators get wrong, and most people find surprising. The rate depends on your age during each year, counted backwards from your redundancy date — not on your age today.

Someone made redundant at 45 after ten years does not get the higher rate for all ten. They get it for the four years since turning 41, and the middle rate for the six years before that. Twelve weeks' pay, not fifteen. The chart above the calculator highlights which of your years fall into which band.

The three caps

Three separate limits apply, and between them they compress what would otherwise be very different outcomes into similar ones.

1. Only your most recent 20 years count. Thirty years of service earns the same as twenty.
2. Weekly pay is capped at £751. Someone on £2,000 a week and someone on £751 a week are treated identically.
3. The total is capped at £22,530. No statutory redundancy payment exceeds this.

The practical effect is that statutory redundancy pay is a safety net rather than compensation proportional to what you earned. For higher earners the gap between the statutory figure and what feels fair can be wide, which is exactly why enhanced packages exist and why they are worth negotiating.

What else you are owed

Redundancy pay is one of three separate entitlements, and people routinely forget the other two.

Your employer should show these separately. They are calculated differently and taxed differently.

• Your notice period, or pay in lieu of it. Use our notice period calculator to check what you are owed.
• Pay for holiday you built up but did not take. Our holiday entitlement calculator will tell you how much you had accrued.
• Any outstanding wages, bonuses or expenses.

You are also entitled to reasonable paid time off to look for new work or arrange training once you have been given notice.

Tax on redundancy money

Statutory redundancy pay is tax free. Redundancy packages as a whole are tax free up to £30,000.

Above £30,000 the excess is taxable. And notice pay is taxed normally even when it arrives in the same lump sum — it is earnings, not compensation for loss of employment. So a generous contractual package is not necessarily all tax free, and the headline number can be misleading.

Untaken holiday pay is also taxed as normal earnings.

A fair process

Redundancy has to be genuine and the process has to be fair. In outline, your employer should consult you before any decision is final, use objective selection criteria if a pool of people is at risk, consider suitable alternative roles, and give you the right of appeal.

Where twenty or more redundancies are proposed at one establishment, collective consultation rules apply with minimum consultation periods.

If any of that has been skipped, or if you think the selection was not objective, get advice quickly. Acas is free and impartial. Employment tribunal time limits are short — normally three months less one day — and they are strictly enforced.

If your employer cannot pay

If your employer is insolvent you can claim statutory redundancy pay, notice pay, holiday pay and unpaid wages from the Redundancy Payments Service through GOV.UK, subject to limits. If your employer can afford it but simply refuses, that is a tribunal claim.

What this calculator cannot do

It calculates the statutory minimum. It does not know about an enhanced contractual scheme, a settlement agreement, or anything negotiated as part of a voluntary redundancy offer.

It cannot tell you whether your redundancy is genuine, whether the process was fair, or whether you have grounds for a claim. It also assumes continuous service — if you have had a break in employment with the same employer, the position is more complicated than this calculator can handle.

A worked example

Someone aged 45, made redundant after ten years, earning £800 a week.

Two things to notice. Only four of the ten years earn the higher rate, because the person turned 41 six years into the job. And the weekly pay used is the capped figure, not the £800 actually earned — which costs them £588.

Voluntary and compulsory redundancy

Volunteering does not reduce your entitlement. Statutory redundancy pay is the same whether you put your hand up or were selected.

Employers often attach an enhanced package to voluntary redundancy to encourage take-up, so the voluntary offer can be worth considerably more than the statutory figure. Weigh it against how likely you are to be selected anyway, and how quickly you expect to find other work.

Be careful about the tax line: the first £30,000 of a redundancy package is tax free, and anything above that is taxable. An enhanced offer that looks generous can shrink once tax is applied to the excess.

Suitable alternative employment

If your employer offers you a suitable alternative role and you unreasonably refuse it, you can lose your redundancy pay. What counts as "suitable" depends on the pay, status, hours, location and your skills — a materially worse role is not suitable simply because it exists.

You have a statutory right to a four-week trial period in a new role. If you decide during that trial that it is not suitable, your redundancy entitlement is preserved as though you had been made redundant on the original date.

Employees on maternity, adoption or shared parental leave have priority over other candidates for suitable alternative vacancies.

Settlement agreements

You may be offered a settlement agreement — a payment in exchange for giving up the right to bring claims. These are common and not sinister, but they are legally binding and they end your options.

A settlement agreement is only valid if you have taken independent legal advice, and your employer normally contributes towards the cost of that advice. Take it. A solicitor will tell you whether the offer is reasonable relative to what you might otherwise claim, which is not something this calculator or any website can assess.

Do not sign under time pressure. Acas recommends a minimum of ten calendar days to consider an offer.

Questions people ask

Do I qualify for statutory redundancy pay?

You need at least two complete years of continuous service as an employee, and you must genuinely be redundant — meaning your job is disappearing, not that you are being dismissed for another reason.

Under two years, there is no statutory redundancy pay, although you are still owed notice and any untaken holiday.

Why does my age affect the amount?

The rate is set by your age during each year of service: half a week's pay for years worked under 22, one week for years worked between 22 and 40, and one and a half weeks from 41 onwards.

The detail most calculators get wrong is that years are counted backwards from your redundancy date, so someone made redundant at 45 after ten years gets the higher rate only for the four years since turning 41 — not for all ten.

What counts as my weekly pay?

Your average gross weekly pay over the twelve weeks before you received your redundancy notice, before tax.

If your pay varies — shift work, commission, regular overtime — take the average across those twelve weeks rather than a typical week.

Why is my weekly pay capped?

Statutory redundancy pay caps the weekly figure used in the calculation, however much you actually earn. The total payment is also capped.

This means a high earner and a middle earner with the same service can receive exactly the same statutory amount. Your contract may promise an enhanced package above the statutory minimum — check it.

Is redundancy pay taxed?

Statutory redundancy pay is tax free. Redundancy packages are tax free up to £30,000 in total.

Anything above £30,000 is taxable, and notice pay is taxed normally even when it is bundled into the same payment. So a generous contractual package is not necessarily all tax free.

What else am I owed besides redundancy pay?

Three other things, all separate from redundancy pay:

• Your notice period, or pay in lieu of it
• Pay for holiday you have built up but not taken
• Any outstanding wages, bonuses or expenses

You are also entitled to reasonable paid time off to look for new work once you have been given notice.

Can I be made redundant while on maternity leave or sick leave?

You can be made redundant while on leave, but you cannot be selected because of it — that would be discrimination. Employees on maternity, adoption or shared parental leave have a right to be offered any suitable alternative vacancy ahead of other candidates.

If you think leave influenced the decision, get advice from Acas quickly. Tribunal time limits are short.

What if my employer cannot afford to pay me?

If your employer is insolvent, you can claim statutory redundancy pay, notice pay, holiday pay and unpaid wages from the Redundancy Payments Service through GOV.UK. There are limits on the amounts.

If your employer can afford it but refuses, you can bring a claim to an employment tribunal — normally within three months less one day of the date the payment was due.