Redundancy Pay Calculator
Statutory redundancy pay
£2,750.00
5 weeks × £550 weekly pay (capped at £700).
How this is calculated
UK statutory redundancy pay is based on age during each year of continuous service, capped at 20 years and at a statutory weekly pay cap of £700 (2026/27).
- 0.5 week's pay for each full year under age 22
- 1 week's pay for each full year aged 22–40
- 1.5 weeks' pay for each full year aged 41+
Employees with under 2 years' continuous service are not entitled to statutory redundancy pay. Enhanced contractual schemes may give more.
Year-by-year breakdown
| Year | Age band | Weeks |
|---|---|---|
| 1 | 22–40 | 1 |
| 2 | 22–40 | 1 |
| 3 | 22–40 | 1 |
| 4 | 22–40 | 1 |
| 5 | 22–40 | 1 |
In-depth guidance
How statutory redundancy pay is calculated
Statutory redundancy pay is a formula, not a negotiation. It uses three inputs: age during each year of service, complete years of continuous service, and a weekly pay figure that is capped by statute.
The formula
| Age during the year of service | Weeks' pay for that year |
|---|---|
| Under 22 | Half a week's pay |
| 22 to 40 | One week's pay |
| 41 and over | One and a half weeks' pay |
- Only complete years count, and service is capped at 20 years, counting back from the date of dismissal.
- A week's pay is capped at the statutory limit that applies on the date of termination, so high earners receive the capped figure.
- Employees need two years' continuous service to qualify at all.
- Statutory redundancy pay is free of income tax and National Insurance, and it counts towards the £30,000 termination payment exemption.
Working out a week's pay correctly
- Fixed hours and fixed pay: use the contractual gross weekly pay at the calculation date.
- Variable hours or output pay: average the gross pay over the 12 weeks ending with the last complete week before dismissal, ignoring weeks with no pay and going further back to make up twelve.
- Overtime counts only where it is guaranteed and the employee is obliged to work it.
- Benefits in kind, discretionary bonuses and expenses are excluded.
- Where an employee was on reduced pay because of sickness or family leave, use the pay they would have received working normally.
Continuous service: what breaks it and what does not
- Sickness, holiday, maternity and other family leave do not break continuity.
- A TUPE transfer preserves continuity, so service with the previous employer counts.
- A genuine break in employment of a full week running Sunday to Saturday can break continuity, but re-engagement within four weeks after redundancy may preserve it.
- Strike days do not break continuity but are deducted from the total service.
Enhanced schemes
If your contract, handbook or established custom promises more than the statutory minimum, that enhanced figure is contractual and enforceable. Check before you issue letters, because withdrawing an enhancement later is a breach of contract claim.
When redundancy pay is not due
- Less than two years' continuous service at the date of dismissal.
- The employee unreasonably refuses an offer of suitable alternative employment.
- The employee resigns before the notice period expires without agreeing an early leaving date.
- The dismissal is genuinely for conduct rather than redundancy, though dismissing for conduct mid-redundancy invites a claim and should not be done without advice.
Paying and recording it
- Give the employee a written statement showing how the payment was calculated.
- Pay it on or shortly after the termination date, and separately identify notice pay and holiday pay, which are taxable.
- Keep the scoring, consultation notes and calculation together in one file for at least six years.
Part of
This calculator returns figures only. For end-to-end employer support, see Redundancy Support for Employers.
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