Redundancy Pay Calculator
2025/26Calculate your statutory redundancy pay, enhanced redundancy, notice pay, and holiday pay.
Your gross pay before tax. Check your payslip for "gross pay".
UK tax rates apply
Weekly pay cap: £719
Additional Options
Expand sections to include enhanced redundancy, notice pay, or holiday pay.
Your Redundancy Pay
Tax Year 2025/26Payment Breakdown
| Component | Gross | Tax | NI | Net |
|---|---|---|---|---|
| Statutory Redundancy11.5 weeks × £500 | £5,750 | £0 | £0 | £5,750 |
| Total | £5,750 | -£0 | -£0 | £5,750 |
Understanding Redundancy Pay in the UK
What is statutory redundancy pay?
Statutory redundancy pay is a legal entitlement for employees who have worked for their employer for at least 2 years continuously and are being made redundant. The amount is calculated based on your age, length of service, and weekly pay (subject to a cap). It is tax-free up to £30,000 and no National Insurance is payable on any redundancy payment.
How is statutory redundancy calculated?
Your redundancy pay is calculated by looking at each complete year of service and applying an age-based multiplier. For years when you were under 22, you get half a week's pay. For years when you were 22-40, you get one week's pay. For years when you were 41 or over, you get one and a half weeks' pay. The maximum service counted is 20 years, and weekly pay is capped at £719 for 2025/26 in Great Britain (£749 in Northern Ireland).
What is enhanced redundancy?
Many employers offer enhanced redundancy packages that go beyond the statutory minimum. Common enhancements include a multiplier (e.g., 2x statutory), removal of the weekly pay cap (using your actual salary instead), or removal of the 20-year service cap. Enhanced redundancy is still tax-free up to £30,000, with excess amounts taxed at your marginal income tax rate but without National Insurance.
What about notice pay and holiday pay?
Notice pay and holiday pay are treated differently from redundancy pay for tax purposes. If you receive Payment in Lieu of Notice (PILON), this is fully taxable as earnings, meaning you pay both income tax and National Insurance. Similarly, any accrued holiday pay that is paid out is taxable as normal earnings. These payments do not count towards the £30,000 tax-free redundancy allowance.
Who qualifies for redundancy pay?
To qualify for statutory redundancy pay, you must be an employee (not a contractor), have worked continuously for your employer for at least 2 years, and be dismissed due to redundancy. Redundancy means your employer needs fewer employees, either because the business is closing, the workplace is closing, or there is less need for employees doing your type of work.
Tax treatment of redundancy payments
The first £30,000 of redundancy pay (statutory and enhanced combined) is completely tax-free. Any amount over £30,000 is subject to income tax at your marginal rate, but importantly, there is no National Insurance on any redundancy payment, even amounts over £30,000. This is different from notice pay and holiday pay, which are subject to both income tax and National Insurance.
Tax Year 2025/26 - Calculations are estimates based on current UK employment law and should not be considered legal or financial advice.