Redundancy Pay Calculator
Calculate an employee's statutory redundancy entitlement for 2026/27 — based on age, length of service and weekly pay.
The redundancy pay calculator calculates how much statutory redundancy pay an employee is owed based on age, length of service, and weekly pay. The redundancy pay calculator computes the statutory redundancy payment by multiplying the age-banded number of weeks by the capped weekly pay and the qualifying years of service. The redundancy pay calculator applies the statutory formula: 0.5 week per year worked under age 22, 1 week per year for ages 22 to 40, and 1.5 weeks per year for ages 41 and over. The weekly pay is capped at the statutory limit, with a maximum of 20 years' service counted and a minimum of 2 years' continuous service required to return any figure.
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Statutory Redundancy
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Statutory redundancy pay is a legal minimum payment set by law, based on age, service, and weekly pay. The statutory redundancy calculation uses age bands to determine the number of weeks earned per year of service: 0.5 week for those under 22, 1 week for ages 22 to 40, and 1.5 weeks for those aged 41 and over. Only complete years of continuous service are counted, up to a maximum of 20 years. The redundancy pay calculator helps both employers and employees confirm the statutory amount before dismissal is finalized, removing manual errors in applying the bands, the service cap, and the weekly pay cap.
Employers should know that redundancy pay does not attract employer National Insurance contributions for the first £30,000, while employer Class 1A NI applies only to amounts above £30,000. Statutory redundancy pay differs from severance pay, because severance can include enhanced redundancy terms above the statutory figure. To keep redundancy pay calculations accurate for 2026/27, employers should use the current statutory weekly pay cap and the £30,000 tax-free limit in their calculations.
What is the redundancy pay calculator?
The redundancy pay calculator is an online tool that calculates the statutory redundancy pay due to a dismissed employee. The redundancy pay calculator requires three key inputs: the employee's age, years of continuous service, and gross weekly pay. The redundancy pay calculator processes these details and determines the total statutory redundancy payment owed to the employee.
The redundancy pay calculator automates the calculation of redundancy pay by applying the statutory formula outlined in UK employment law. The redundancy pay calculator computes the figure based on the average earnings over the 12 weeks before the employee receives redundancy notice and requires a minimum of 2 years' continuous service to qualify. The redundancy pay calculator uses the current statutory weekly pay cap, so the result complies with legal maximums.
How does the redundancy pay calculator work?
The redundancy pay calculator multiplies the age-banded number of weeks by the capped weekly pay and the qualifying years of service. The redundancy pay calculator produces accurate statutory redundancy pay calculations based on UK employment law.
The redundancy pay calculator first assigns weeks based on age: 0.5 week per year worked under age 22, 1 week per year for ages 22 to 40, and 1.5 weeks per year for ages 41 and over. The redundancy pay calculator then multiplies this figure by the weekly pay, which is capped at the statutory limit. The redundancy pay calculator counts a maximum of 20 years of service and requires at least 2 years of continuous employment to generate a redundancy pay figure. Only complete years of service are counted, and any service beyond 20 years is ignored.
How much statutory redundancy pay will an employee get?
Age 35, 10 years' service
£7,510
10 weeks of capped pay at the £751 statutory weekly cap
An employee's statutory redundancy pay is calculated based on age, years of service, and weekly pay, up to a 20-year limit. An employee aged 35 with 10 years of continuous service can receive 10 weeks of capped pay, totaling £7,510 if earning at or above the statutory weekly cap of £751. The key factors influencing this amount are the employee's age, the capped weekly pay, and the total qualifying years of service.
The statutory redundancy pay amount represents the legal minimum that employers must provide. Many employers offer enhanced contractual redundancy schemes that may exceed this statutory minimum. Enhanced contractual redundancy schemes might include a higher weekly pay cap, additional weeks per year of service, or both, resulting in a larger payout. Contractual redundancy pay is set out in the employment contract or company policy, and the first £30,000 of any redundancy payment is tax-free.
Is the redundancy pay calculator accurate?
Yes, the redundancy pay calculator is accurate when age, length of service, and gross weekly pay are entered correctly. The redundancy pay calculator applies the statutory formula for redundancy pay and complies with UK employment law. The redundancy pay calculator uses the age-band multipliers of 0.5 week for those under 22, 1 week for ages 22 to 40, and 1.5 weeks for those 41 and over. The weekly pay is capped at £751, and the calculation counts up to 20 years of service.
The redundancy pay calculator provides the statutory minimum redundancy payment. The redundancy pay calculator does not account for enhanced contractual redundancy schemes, notice pay, or accrued holiday pay, which may be owed. Employers should confirm the accuracy of all input data, such as the employee's exact age, years of continuous service, and the correct gross weekly pay averaged over the 12 weeks before the redundancy notice, to avoid discrepancies.
What is the formula for redundancy pay?
Statutory redundancy pay is calculated using the formula: age-banded weeks per year multiplied by capped weekly pay multiplied by the years of service. The redundancy pay formula determines the minimum legal payment an employer must provide to an eligible employee facing redundancy.
Formula
Redundancy pay = Age-band weeks/year × Capped weekly pay × Years of service
Definition of Each Term
Age-Band Multiplier
The age-band multiplier sets the number of weeks earned for each full year worked. Employees under 22 years earn 0.5 weeks per year, those aged 22 to 40 earn 1 week per year, and employees aged 41 and over earn 1.5 weeks per year.
Capped Weekly Pay
The weekly pay is capped at a statutory limit, which is £751 for England, Scotland, and Wales, and £783 for Northern Ireland. The cap excludes earnings above these amounts from the calculation.
Years of Service
Only complete years of continuous employment are counted, up to a maximum of 20 years. Employees must have at least 2 years of service to qualify.
Worked Example
An employee aged 43 has 8 years of continuous service and a gross weekly pay of £600. The calculation is 1.5 weeks × £600 × 8 years = £7,200. If the employee earned £900 per week, the capped amount applies: 1.5 weeks × £751 × 8 years = £9,012. The worked example shows how the statutory weekly pay cap sets a fair minimum payment based on age, service, and earnings up to the threshold.
How is statutory redundancy pay calculated?
Statutory redundancy pay is calculated by reviewing each full year of service and applying the corresponding age-band rate for the employee's age during that year. The calculation assigns 0.5 week for each year worked under age 22, 1 week for each year between ages 22 and 40, and 1.5 weeks for each year at age 41 and over. The total number of weeks earned is then multiplied by the employee's gross weekly pay, which is subject to a statutory cap, to determine the final redundancy payment. Statutory redundancy pay reflects both the employee's tenure and age, with the payment capped at a maximum of 20 years of service.
How does age affect redundancy pay calculation?
Age determines the number of weeks of redundancy pay earned per year of service across three distinct age bands. Employees under 22 years earn 0.5 week of pay for each full year worked. Employees aged between 22 and 40 receive 1 week of pay per year. Employees aged 41 and over earn 1.5 weeks of pay for each year of service. The age-banded structure reflects the increasing value placed on experience and the challenges older workers face when looking for new employment. The redundancy pay calculation applies these rates to each year of service, so older employees accrue redundancy entitlements faster.
Workers aged 41 and over
Workers aged 41 and over earn 1.5 weeks of capped pay for each full year worked at that age. Redundancy pay for workers over 41 uses a per-year multiplier of 1.5 weeks, the highest statutory rate. An employee aged 45 who has worked for 10 years in this age band receives 15 weeks' pay. The 15 weeks' pay is then multiplied by the weekly pay, capped at the statutory limit of £751, resulting in a payment of £11,265. The 20-year service cap applies, limiting the maximum payment to 30 weeks' pay for years worked aged 41 and over.
Workers aged 22 to 40
Workers aged 22 to 40 earn 1 week of capped pay for each full year worked in that band. Redundancy pay for workers aged 22 to 40 multiplies the number of complete years served in this age range by the statutory capped weekly pay. An employee aged 30 who has worked for 6 years receives redundancy pay calculated as 6 years × 1 week × £751 = £4,506. Each year of service contributes equally to the redundancy pay within this age bracket.
Workers under 22
Workers under 22 earn 0.5 week of capped pay for each full year worked under that age. Redundancy pay for workers under 22 follows the statutory redundancy formula's approach to younger employees, accounting for shorter tenure. An employee who worked for four full years under the age of 22 earns two weeks of redundancy pay, calculated as 4 years × 0.5 weeks per year.
The redundancy pay calculation applies the statutory weekly pay cap, which in England, Scotland, and Wales is set at £751. If the employee's weekly pay is below this cap, the actual pay figure is used in the calculation. For an employee earning £600 weekly, the redundancy payment is £600 (1 week × £600), assuming two years of service. Only complete years of service count toward the calculation, and the employee must have at least two years of continuous service to qualify for statutory redundancy pay.
How Does Length of Service Affect Redundancy Pay?
Redundancy pay increases with each full year of continuous service, up to a maximum of 20 years. Longer continuous service produces higher redundancy compensation. Service below two years disqualifies an employee from statutory redundancy pay, because eligibility requires at least two years of continuous employment. Only complete years of service are counted, and any years beyond the 20-year cap are excluded from the calculation. The redundancy pay system rewards an employee's loyalty while maintaining a ceiling to balance employer liabilities.
What is the purpose of a redundancy pay calculator?
The redundancy pay calculator lets employers and employees confirm the exact statutory redundancy owed before a dismissal is finalised. Users enter details such as age, length of service, and weekly pay, and the redundancy pay calculator produces accurate calculations without manual errors. The redundancy pay calculator removes common mistakes associated with age-band and weekly-cap calculations and provides clarity on the statutory minimum amount due. The redundancy pay calculator helps employers budget for redundancy costs accurately and allows employees to understand their entitlements during job transitions.
What Benefits Does a Redundancy Pay Calculator Provide?
A redundancy pay calculator provides several key benefits that support accuracy and compliance with statutory requirements. The main benefits of a redundancy pay calculator are listed below.
Accurate Statutory Figure
The redundancy pay calculator provides a precise calculation of statutory redundancy pay owed, so both employers and employees have a clear understanding of the payment due.
Correct Age-Band Weighting
The redundancy pay calculator applies the correct age-band multipliers (0.5, 1, or 1.5 weeks per year) based on the employee's age, which sets the correct redundancy pay.
Right Capped Weekly Pay Applied
The redundancy pay calculator uses the statutory capped weekly pay limit, preventing errors that might occur with manual calculations and keeping the calculation within legal limits.
The benefits of a redundancy pay calculator reduce errors, support legal compliance, and give both employers and employees confidence regarding redundancy payments.
What Is Statutory Redundancy Pay?
Statutory redundancy pay is the minimum payment an employer must give an employee dismissed for redundancy. Statutory redundancy pay is mandated by law and is calculated based on three factors: the employee's age, length of continuous service, and weekly pay. The statutory redundancy calculation follows a set formula that applies age-based multipliers to each year of service: 0.5 week for each year under age 22, 1 week for each year from age 22 to 40, and 1.5 weeks for each year aged 41 or over. The resulting weeks are then multiplied by the employee's gross weekly pay, subject to a statutory cap.
The purpose of statutory redundancy pay is to provide financial compensation to employees who lose their jobs due to redundancy and to give them a guaranteed baseline payment. Statutory redundancy pay is available to employees who have completed at least two years of continuous service with their employer and face a genuine redundancy situation where the job itself is ending. The first £30,000 of any redundancy payment is tax-free, so statutory redundancy pay often falls entirely within this tax-exempt threshold.
What does it mean in UK employment law?
In UK employment law, statutory redundancy pay is a legal entitlement for qualifying employees made redundant. Statutory redundancy pay is established by the Employment Rights Act and becomes applicable once an employee has completed at least two years of continuous service with the same employer. Statutory redundancy pay is calculated based on the employee's age, length of service, and weekly pay, and applies when the role is genuinely redundant and not simply being replaced.
What is its purpose?
Statutory redundancy pay compensates an employee for losing a job through no fault of their own. Statutory redundancy pay provides financial support during the transition period between jobs, because the dismissal results from the employer's business needs rather than the employee's performance or conduct. Statutory redundancy pay serves as a basic financial buffer, helping the worker manage expenses while looking for new employment opportunities. It provides dismissed workers with a guaranteed minimum payment that bridges the gap during unemployment and offers a safety net to manage personal expenses and stabilize finances.
How Does Redundancy Pay Work?
Redundancy pay is calculated at the time of dismissal and is paid by the employer along with any notice and accrued holiday pay. The first £30,000 of the redundancy payment is exempt from tax, providing financial relief to the employee during the transition period. The redundancy pay structure gives employees a fair compensation package when employment is terminated due to redundancy.
Statutory redundancy pay is determined by the employee's age, length of service, and gross weekly pay, with set age-banded calculations. Employees under 22 receive 0.5 weeks of pay for each full year worked, those aged 22 to 40 receive 1 week per year, and employees 41 and over receive 1.5 weeks per year. The weekly pay used in these calculations is capped at £751 for the tax year 2026/27, keeping consistent application of the statutory limits.
What are your rights during a redundancy consultation?
Employees have the right to be consulted before redundancy and to receive notice and any redundancy pay owed. During a redundancy consultation, employees are entitled to be informed about the reasons for the proposed redundancy, the numbers and job roles affected, and how the selection process will work. Employees have the right to suggest alternatives to redundancy and to be accompanied by a workplace colleague or trade union representative during individual consultation meetings.
What is pay in lieu of notice during redundancy?
Pay in lieu of notice is a payment covering the notice period when the employer ends employment immediately. Instead of requiring the employee to work through the notice period, the employer provides a lump-sum payment equivalent to the wages the employee would have earned during that time. Pay in lieu of notice gives the employee compensation for the notice period the employee would otherwise have worked. Pay in lieu of notice is distinct from statutory redundancy pay, which compensates for job loss. For accurate calculations, refer to the Notice Pay Calculator topic.
What are the eligibility criteria for statutory redundancy pay?
An employee qualifies for statutory redundancy pay after at least 2 years' continuous service and a genuine redundancy dismissal. The role must be ending, not the individual being replaced. Employees on fixed-term contracts may be eligible when the non-renewal results from the job ceasing to exist. Certain groups are not eligible, including those employed for less than 2 years, self-employed individuals, and certain professions such as police officers and armed forces personnel. Employees can lose the right if they reject suitable alternative work without a valid reason, leave prematurely, or are terminated for gross misconduct. Only legal employees qualify; agency workers, casual workers, or those on zero-hour contracts do not meet the eligibility criteria.
Who qualifies?
Employees with 2 or more years' continuous service who are dismissed because the job is redundant qualify for statutory redundancy pay. The dismissal must be a genuine redundancy where the role itself is ending, not simply replacing the individual. Part-time employees are entitled to statutory redundancy pay on the same terms as full-time staff, provided they meet the 2-year continuous service requirement. Yes, part-time workers with 2 years' continuous service are entitled on the same basis as full-time staff, calculated using age, continuous service, and gross weekly pay, with the same statutory weekly cap and 20-year service limit.
How long must you work?
An employee must have at least 2 years' continuous service to qualify for statutory redundancy pay. The 2-year requirement is mandated by UK employment law under the Employment Rights Act. Without completing two full years of continuous employment with the same employer, no statutory redundancy payment is due, regardless of the employee's age or weekly pay.
What Should Employers Know Before Making Redundancies?
Employers must follow a fair process, consult affected staff, and budget for redundancy pay plus notice and holiday pay. The statutory redundancy figure represents the minimum payment required by law. Any enhanced redundancy scheme or contractual severance agreement increases the total cost of the redundancy exercise.
Employers should confirm a genuine redundancy situation, where the role itself is ending, not just replacing the individual. A genuine redundancy keeps the dismissal lawful and the redundancy payment due. Financial planning, including budgeting for notice pay and accrued holiday pay, helps employers meet all legal obligations and avoid tribunal claims for unpaid amounts.
Does Redundancy Pay Attract Employer National Insurance?
No, the first £30,000 of a redundancy payment is free of tax and National Insurance. Employer Class 1A National Insurance applies only to amounts exceeding £30,000. Statutory redundancy pay remains within this tax-free threshold due to the capped weekly pay and 20-year service limit. For any redundancy payment surpassing £30,000, employers must calculate Class 1A National Insurance on the excess. An Employer National Insurance Calculator helps determine the precise cost of this excess for accurate financial planning.
What is the difference between statutory redundancy pay and severance pay?
Statutory redundancy pay is the legal minimum set by formula, while severance pay is any additional or contractual amount the employer chooses to offer. Statutory redundancy pay is determined by age, length of service, and capped weekly pay, setting a baseline compensation for employees dismissed due to redundancy. Severance pay can include enhanced redundancy terms above the statutory figure and is often negotiated between the employer and employee. Severance pay may reflect the employee's contribution to the company or serve to aid the transition to new employment.
Keeping Your Redundancy Pay Calculation Accurate for 2026/27
An accurate redundancy pay calculation for 2026/27 requires using the current weekly pay cap and the £30,000 tax-free limit. The weekly pay cap is set at £751 for Great Britain and £783 for Northern Ireland. Employers must use these figures to comply with statutory requirements. Outdated caps lead to incorrect calculations, potentially resulting in underpayment or disputes.
Employers should verify the current pay cap published by the government to maintain accuracy in redundancy payments. The verification confirms employees receive the full legal entitlement, and employers avoid legal risks. The £30,000 tax-free threshold remains unchanged, so redundancy payments below this amount are free from income tax and National Insurance. An updated redundancy pay calculator that reflects the 2026/27 rates supports both accuracy and compliance.