Free tool · rates from 6 April 2026
Redundancy pay calculator
Statutory redundancy pay for dismissals on or after 6 April 2026. Weekly pay is capped at £751 and the maximum payment is £22,530.
How it is worked out
For each complete year of service, counting back from the dismissal date and capped at twenty years: one and a half weeks' pay for each year worked at age 41 or over, one week for each year at 22 to 40, and half a week for each year under 22. Weekly pay is capped at £751 for dismissals on or after 6 April 2026, which makes the maximum possible payment £22,530. Statutory redundancy pay is free of tax.
What makes a redundancy a redundancy
A redundancy exists where the business is closing, the site is closing, or the need for employees to do work of a particular kind has reduced or stopped. That is the whole test. If the work is still there and someone else picks it up, it is not a redundancy, whatever the letter calls it.
This matters because using redundancy as a route to remove a particular person is one of the most common and most expensive mistakes a small employer makes. The role goes, then reappears under a different title six weeks later, and the paperwork you produced becomes the evidence against you.
Process, which is where the money is lost
The payment is the easy part and the calculator above does it. What costs money is process: a genuine selection pool, objective and applied criteria, individual consultation before any decision is made, consideration of alternative roles, and the right of appeal. Twenty or more proposed redundancies at one establishment within 90 days triggers collective consultation with its own timetable and its own penalties.
Consultation has to happen while the outcome is still capable of changing. Consulting after the decision is made is not consultation, and it is usually obvious from the dates on the documents.
What sits on top of the statutory figure
Notice pay or pay in lieu, accrued untaken holiday, and anything the contract or a custom of the business adds. Statutory redundancy pay up to £30,000 is normally free of tax and National Insurance, but pay in lieu of notice is not, and getting that split wrong creates a payroll problem rather than an employment one.
Common questions
How much statutory redundancy pay will someone get?
Half a week's pay for each complete year under 22, one week for each year from 22 to 40, and one and a half weeks for each year at 41 or over. Service is capped at 20 years, weekly pay at £751, and the total at £22,530.
How long must someone work to qualify for redundancy pay?
Two complete years of continuous service at the date of dismissal.
Is statutory redundancy pay taxable?
Genuine redundancy payments are normally free of tax and National Insurance up to £30,000. Pay in lieu of notice is taxable in the usual way.
What counts as a genuine redundancy?
The business or site is closing, or the need for employees to do work of a particular kind has reduced or ceased. If the same work continues and someone else does it, it is unlikely to be a redundancy.
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