How statutory redundancy pay works
Count back from your redundancy date, one full year of service at a time, up to 20 years. For each year:
| Your age during that year | Weeks of pay |
|---|---|
| Under 22 | 0.5 |
| 22 to 40 | 1 |
| 41 and over | 1.5 |
Multiply the total weeks by your weekly pay before tax, capped at £751 for redundancies on or after 6 April 2026. A week’s pay is your normal pay for your contracted hours; if your hours vary, it is the average over the last 12 weeks.
Worked example: aged 45 with 10 years’ service
Age 45, 10 full years, £800 a week, redundant after 6 April 2026
The last four years of service were at ages 41 to 44 (1.5 weeks each = 6 weeks) and the six before that at ages 35 to 40 (1 week each = 6 weeks): 12 weeks in total. Weekly pay is capped at £751, so statutory redundancy pay is £9,012.00.
- Total with enhancement
- £9,012
- Tax-free
- £9,012first £30,000
- Weekly pay used
- £751.00cap £751
- Weeks of paymax 20 years counted
- 12
- Weekly pay (capped)
- £751.00
- Statutory redundancy pay
- £9,012.00
- Taxable amount over £30,000taxed as income, no NI
- £0.00
The maximum anyone can receive is 30 weeks × £751 = £22,530, for someone aged 61 or older with 20 or more years’ service.
What changed in April 2026
The weekly pay cap is uprated every April in line with inflation. It rose to £751 for redundancies on or after 6 April 2026. The £30,000 tax-free limit for termination payments has not changed since 1988.
Before you accept a package
- Check your contract or handbook for enhanced redundancy — many employers pay more than the statutory minimum.
- Notice pay is separate: at least one week per year of service up to 12 weeks, taxed as earnings.
- Settlement agreements must be signed after independent legal advice; employers often contribute to the cost.
- Pension contributions: paying part of a large payment into a pension can reduce the tax on amounts above £30,000.