Redundancy Calculator
Calculate statutory redundancy pay and assess tribunal risk based on April 2026 rates.
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Enter employee details to calculate redundancy pay
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Important Disclaimer
This tool provides indicative calculations only and does not constitute financial, accounting, tax, or legal advice. The accuracy of results depends on the accuracy of information you provide. Consult a qualified professional for complex situations.
Overview
Statutory redundancy pay is a legal entitlement for employees with at least 2 years' continuous service who are dismissed because their employer needs fewer employees, or because the workplace is closing. The amount depends on three things: your age, your length of continuous service (capped at 20 years), and your weekly pay — capped at £751 per week from 6 April 2026, up from £719 in 2025/26. The maximum statutory payment for 2026/27 is £22,530 (30 weeks × £751). Many employers offer enhanced redundancy terms above the statutory minimum, so always check your contract and staff handbook: the calculator shows the statutory floor, not necessarily your full entitlement.
Worked Example (2026/27)
### Worked Example: 12 Years' Service, Aged 55
**Inputs**: made redundant at age 55 with 12 complete years' service and gross weekly pay of £800.
**Calculation**: 1. Weekly pay is above the statutory cap, so £751 is used, not £800 2. All 12 years were served aged 41 or over → 12 × 1.5 weeks = 18 weeks 3. Statutory redundancy pay: 18 × £751 = **£13,518** 4. Statutory notice: one week per complete year of service, capped at 12 → **12 weeks' notice** (or pay in lieu)
**Tax position**: the £13,518 statutory payment sits well within the £30,000 tax-free limit, so it is paid free of income tax and NI. Any payment in lieu of notice (PILON) on top is always taxed as normal earnings.
2026/27 Rates & Thresholds
| Item | 2026/27 Value |
|---|---|
| Weekly pay cap | £751 (up from £719) |
| Maximum statutory payment | £22,530 (30 weeks × £751) |
| Service cap | 20 years |
| Each full year served under age 22 | 0.5 week's pay |
| Each full year served aged 22–40 | 1 week's pay |
| Each full year served aged 41+ | 1.5 weeks' pay |
| Tax-free limit (statutory + enhanced combined) | £30,000 |
| Qualifying service | 2 years minimum |
| Statutory notice | 1 week per year of service (1–12 weeks) |
How Redundancy Pay Is Taxed
The first £30,000 of any redundancy package — statutory and contractual enhancement combined — is free of income tax and National Insurance. The £30,000 threshold has been unchanged since 1988 and is not indexed to inflation. Anything above £30,000 is taxed as employment income at your marginal rate. Payments in lieu of notice (PILON) are treated differently: they are always fully taxable and NI-able, whether or not your contract provides for them, and they do not use up the £30,000 exemption.
If Your Employer Is Insolvent
If your employer cannot pay because it is insolvent, you can claim statutory redundancy pay from the government's National Insurance Fund through the Redundancy Payments Service. Claims must be made within 6 months of the employment ending. The Fund covers statutory redundancy pay, up to 8 weeks' unpaid wages (at the statutory weekly cap), accrued holiday pay, and statutory notice pay.
Common Mistakes HMRC Penalises
- Counting partial years — only complete years of service count, worked backwards from the dismissal date.
- Applying your real weekly pay when it exceeds the £751 statutory cap.
- Assuming the age multiplier is set once — service is split into the bands you were actually in during each year (under 22, 22–40, 41+).
- Treating PILON as tax-free redundancy pay — it is always fully taxable.
- Missing enhanced contractual terms — the statutory figure is a floor, and many employers pay more.
- Assuming contractors or agency workers qualify — statutory redundancy pay is for employees only.
When to Seek Professional Advice
Take advice if you suspect the redundancy is not genuine (your role is being re-advertised), if you were selected unfairly or while on maternity leave, or if you're asked to sign a settlement agreement — for a settlement agreement to be binding you must receive independent legal advice, usually paid for by the employer. Directors and employee-shareholders should also check their position: directors qualify for statutory redundancy pay only if they have a genuine employment contract.
Frequently Asked Questions
How is statutory redundancy pay calculated?+
Statutory redundancy pay is based on your age, weekly pay (capped at £751 for 2026/27), and length of continuous service (capped at 20 years). You get 0.5 week's pay for each full year of service under age 22, 1 week's pay for each full year aged 22–40, and 1.5 weeks' pay for each full year aged 41 or over. The maximum statutory payment for 2026/27 is £22,530 (30 weeks × £751).
What is the statutory weekly pay cap for 2026/27?+
The statutory weekly pay cap is £751 from 6 April 2026, up from £719 in 2025/26. If your actual weekly pay is above the cap, the cap applies for statutory redundancy purposes. Many employers offer enhanced redundancy terms above the statutory minimum — check your contract and company policy.
Is redundancy pay taxable?+
The first £30,000 of redundancy pay (statutory and contractual combined) is tax-free, and no National Insurance is charged on it. Any amount above £30,000 is taxed as employment income at your marginal rate. Statutory redundancy pay is always within the £30,000 threshold. Payments in lieu of notice (PILON) are always fully taxable.
How much notice must an employer give?+
The statutory minimum notice is 1 week for service between 1 month and 2 years, 1 week per year of service for 2–12 years, and 12 weeks for 12 or more years. Your contract may provide longer notice, and with at least 2 years' service you are entitled to reasonable paid time off during notice to look for work.
Who qualifies for statutory redundancy pay?+
You must be an employee (not a contractor or agency worker) with at least 2 years' continuous service, dismissed by reason of redundancy — the employer needs fewer employees for particular work, or the workplace is closing. Directors can qualify if they have a genuine employment contract.
What if my employer cannot afford to pay?+
If your employer is insolvent, claim statutory redundancy pay from the government's National Insurance Fund through the Redundancy Payments Service within 6 months of your employment ending. The Fund also covers up to 8 weeks' unpaid wages (at the statutory cap), holiday pay, and notice pay.
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