Redundancy Pay Calculator UK
Our redundancy pay calculator estimates your statutory redundancy entitlement for the 2025/26 tax year based on your age, length of service and weekly pay. If you are facing redundancy or want to understand your rights, this tool calculates the minimum your employer must pay by law, shows the tax-free portion and estimates your notice period. Statutory redundancy pay is calculated using a formula based on your age at each year of service, with weekly pay capped at £643 and a maximum of 20 years counted. The first £30,000 of any redundancy payment is completely tax-free. Whether you are negotiating a settlement or checking your employer's figures, this calculator gives you a clear starting point.
Understanding Statutory Redundancy Pay
Statutory redundancy pay is the legal minimum your employer must pay if you are made redundant after at least two years of continuous service. The amount depends on your age during each year of employment: half a week's pay for each year you were under 22, one week's pay for each year between 22 and 40, and one and a half weeks' pay for each year aged 41 or over. Weekly pay is capped at £643 for 2025/26, and a maximum of 20 years of service can be counted. Many employers offer enhanced redundancy packages above the statutory minimum, particularly in larger organisations, so always check your contract and staff handbook before accepting the first offer.
Tax on Redundancy Pay in the UK
The first £30,000 of a redundancy payment is completely free from income tax and National Insurance. This includes both statutory and enhanced redundancy pay. Any amount above £30,000 is added to your income for the tax year and taxed at your marginal rate. Notice pay, whether worked or paid in lieu, is always taxable in full. If your total package exceeds £30,000, your employer will deduct tax on the excess through PAYE. Full details on the tax treatment of termination payments are available on the GOV.UK redundancy rights page.
What to Do If You Are Made Redundant
If you believe the redundancy process was unfair, you can raise a grievance with your employer and seek free advice from ACAS. You have six months from the date of dismissal to make a claim at an employment tribunal. If your employer is insolvent and cannot pay, you can claim from the government's Redundancy Payments Service. While you look for your next role, use our take home pay calculator to compare salary offers, and check our holiday pay calculator to ensure you receive payment for any accrued but untaken annual leave in your final settlement.
The first £30,000 is completely tax-free. Any amount above is treated as income and taxed at your normal rate.
£643 for 2025/26. Even if you earn more, statutory calculation uses the cap. Employers may offer enhanced packages using actual pay.
Maximum 20 years. You need at least 2 years continuous service to qualify at all.
Raise a written grievance first. If unresolved, claim at an employment tribunal within 6 months. If employer is insolvent, claim from the Redundancy Payments Service.
Yes, statutory is the legal minimum. Many employers offer enhanced packages. Seek advice from ACAS or a solicitor before accepting.
This calculator provides estimates for guidance only. Results use 2025/26 HMRC rates. This is not financial, legal or professional advice. For regulated financial advice, speak to a qualified financial adviser.