Redundancy Pay Calculator
Work out statutory redundancy pay year by year: the age bands, the capped week’s pay, the 20-year limit, and how much of the payment is free of tax.
Northern Ireland sets its own caps, and they are higher.
Use the original redundancy date, even if notice was brought forward or paid in lieu.
Whole years only: 3 years and 9 months counts as 3. Only the last 20 count.
Before tax and any other deductions. Anything above £751 a week is ignored for this calculation.
Statutory redundancy pay
Statutory redundancy pay
£0
Three figures: the age at redundancy, the complete years of service and the gross weekly pay. The entitlement is half a week’s pay for each year worked under 22, a full week from 22 to 40, and a week and a half from 41, with the week’s pay capped at £751 and service capped at 20 years.
Redundancies, run properly through payroll
Moonworkers splits the tax-free redundancy payment from the taxable notice pay and holiday balance, reports each correctly on the FPS, and produces a final payslip the employee can actually read.
How statutory redundancy pay is worked out
Three inputs, three caps, and one detail about age that trips up most spreadsheets.
Step 1
Count the years backwards
Each complete year of service is valued at the age the employee was during it, working back from the redundancy date. Only the last 20 years count.
Step 2
Price each band
Half a week under 22, a full week from 22 to 40, one and a half weeks from 41. Add them up to get the total weeks owed.
Step 3
Apply the capped week
Multiply by the week’s pay, capped at £751, or £783 in Northern Ireland. The first £30,000 of the result is free of tax and all of it is free of National Insurance.
Redundancy pay is only part of the final payslip. See also the take-home pay calculator for what the taxable elements leave behind.
Redundancy pay: frequently asked questions
How is statutory redundancy pay calculated?
Half a week’s pay for each full year worked while under 22, one week for each full year from 22 to 40, and one and a half weeks for each full year from 41. Service is capped at 20 years and a week’s pay at £751 in 2026-27, so the most anyone can receive is £22,530.
Who qualifies?
Employees with at least 2 years of continuous service who are dismissed by reason of redundancy. Below 2 years there is no statutory entitlement at all, and the official GOV.UK calculator will not accept a shorter period.
Why does the age band use my age during each year, not my age now?
Because the entitlement is built one year of service at a time, and each year is valued at the age the employee was while working it. Someone who has just turned 41 with 10 years of service gets ten weeks, not fifteen, because only the most recent year was worked at 41.
What is different in Northern Ireland?
The caps. Northern Ireland sets its own limits and they are higher: a week’s pay is capped at £783 rather than £751 for 2026-27, giving a maximum payment of £23,490 rather than £22,530. The age bands and the 20-year limit are identical.
Is redundancy pay taxed?
A genuine redundancy payment is free of National Insurance entirely, and free of income tax up to £30,000. Anything above £30,000 is taxed as earnings through payroll. Notice pay and payment for untaken holiday are not part of that £30,000 and are taxed normally.
Does notice pay come out of the redundancy payment?
No. Statutory notice is a separate entitlement on top: one week after a month of service, then one week for each complete year, capped at 12 weeks. It is paid as earnings, whether the employee works it, spends it on garden leave, or is paid in lieu.
Can an employer pay more than this?
Yes, and many do through a contractual redundancy scheme. The statutory figure is a floor, never a ceiling. What an employer cannot do is pay less, or count a part year as a full one.
What counts as a week’s pay?
Gross pay before tax and other deductions, for the employee’s normal working hours. For someone with no normal hours or variable pay, it is the average over the 12 weeks before the calculation date. Whatever the figure, only the first £751 of it counts.
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