How statutory redundancy pay is worked out
If you are made redundant after at least 2 full years with your employer, the law guarantees a minimum payout. It is built from three ingredients: your age, your length of service and your gross weekly pay. Service is counted backwards from your redundancy date, one full year at a time, and each year is credited by the age you were when you worked it:
- 1.5 weeks' pay for each year worked aged 41 or over
- 1 week's pay for each year worked aged 22 to 40
- 0.5 weeks' pay for each year worked under 22
The caps apply to redundancies on or after 6 April 2026. Weekly pay means your average gross earnings over the 12 weeks before you were given notice, and only the last 20 years of service count.
Worked examples
Tax, notice pay and the rest of the package
Statutory redundancy pay is tax-free, and so is the first £30,000 of a redundancy package overall. On top of it you are separately entitled to your notice period (worked or paid in lieu), any accrued untaken holiday, and anything better your contract promises. Notice pay and holiday pay are ordinary earnings, so they are taxed as normal. Many employers pay enhanced redundancy above the statutory floor; the calculator shows only the legal minimum.
Check the official figure
The count-back detail matters at the edges: only full years count, and a year worked while you were 40 counts as 1 week even if you are 41 on your redundancy date, because the credit follows the age you were during that year. For your exact entitlement, including tricky service dates, use the official calculator at gov.uk/calculate-your-redundancy-pay and see redundancy: your rights. This page is guidance, not legal advice.
Frequently asked questions
Who qualifies for statutory redundancy pay?
Employees with at least 2 full years of continuous service who are dismissed because the job itself is disappearing. You do not qualify with under 2 years' service, if you are self-employed, or usually if you turn down a suitable alternative role with the same employer without good reason.
What counts as a week's pay?
Your average gross weekly earnings over the 12 weeks before you were given notice. For redundancies on or after 6 April 2026 it is capped at £751 a week, so higher earners have their entitlement worked out as if they earned £751. The overall statutory maximum is £22,530.
Is redundancy pay taxed?
Statutory redundancy pay is tax-free, and the first £30,000 of any combined redundancy package is too. Anything above £30,000 is taxed as income. Payments that are really wages, such as notice pay and holiday pay, are taxed as normal regardless.
Why do older years of service count for more?
The law credits each of your last 20 years of service by the age you were at the time: half a week's pay for years worked under 22, one week for years at 22 to 40, and one and a half weeks for years at 41 or over. The years are counted backwards from your redundancy date.
Can my employer pay more than the statutory amount?
Yes. Statutory redundancy pay is only the legal minimum. Many employers offer enhanced redundancy packages in the contract or as part of a settlement agreement, often a multiple of the statutory figure or based on uncapped pay. Check your contract and any collective agreement.