Applies in: England & Wales Reviewed: 12 Oct 2026 by LawTheGuide editorial team Law as of: 1 Oct 2026 Written for employees

I have been made redundant. How much statutory redundancy pay am I owed?

Short answer

Statutory redundancy pay is calculated using your age, weekly pay (capped at £643 from April 2026), and years of continuous service. You qualify after two years. The formula is: half a week's pay per year under 22; one week's pay per year between 22 and 40; one and a half week's pay per year aged 41 or over.

Your employer's contract may offer enhanced redundancy pay above the statutory minimum. The statutory figure is a floor — you cannot be paid less.

91 Day deadline
5 Steps to follow
5 Items to gather
4 Primary sources

1 The rule

The right to statutory redundancy pay is set out in the Employment Rights Act 1996. The calculation method is fixed by statute — neither employer nor employee can contract out of it downwards.

Employment Rights Act 1996, ss.162–166 Layer 02 · Statutes and codes
"The amount of a redundancy payment shall be calculated by reference to the period of continuous employment, ending with the relevant date, during which the employee has been employed by the employer."
Read the official text

The weekly pay cap is reviewed annually. From April 2026 the cap is £643 per week. The maximum statutory redundancy payment is therefore £19,290 (30 weeks × £643).

2 What you can do now

  1. Confirm you qualify

    You must have been continuously employed for at least two years at the effective date of termination. Check your start date — continuous employment can survive certain breaks such as a TUPE transfer. Short gaps caused by illness or lay-off do not always break continuity.

  2. Find your weekly pay

    If you work fixed hours, weekly pay is your gross pay for a normal working week. If hours vary, it is averaged over the 12 weeks before the redundancy date. Cap the figure at £643 (from April 2026). If your actual weekly pay is lower than the cap, use the actual figure.

  3. Count your complete years of service

    Only complete years count. Partial years are ignored. The maximum is 20 years — service beyond 20 years is not included in the statutory calculation. Count backwards from the effective date of termination.

  4. Apply the age-based multiplier

    For each complete year of service: 1.5 weeks if you were 41 or over during that year; 1 week if you were 22–40; 0.5 weeks if you were under 22. Add the weeks together and multiply by your (capped) weekly pay.

  5. Check your payslip and request a written statement

    Your employer must give you a written statement showing how the redundancy pay was calculated. If the amount on your payslip differs from your calculation, raise a grievance in writing. If unresolved, you can apply to an Employment Tribunal.

3 When this does not apply

  • You have been employed for less than two years continuously.
  • You were offered suitable alternative employment and unreasonably refused it — you may lose the right to statutory redundancy pay.
  • You resigned rather than being dismissed, unless you resigned in response to a genuine redundancy situation (constructive dismissal).
  • You committed gross misconduct during the notice period — the employer may withhold payment.

4 Common questions

Does redundancy pay count as taxable income?

The first £30,000 of a redundancy payment is exempt from income tax under <a href="https://www.legislation.gov.uk/ukpga/2003/1/section/403" target="_blank" rel="noopener noreferrer">section 403 of the Income Tax (Earnings and Pensions) Act 2003</a>. Amounts above £30,000 are taxed as income in the normal way. National Insurance contributions are not due on statutory redundancy pay. <a href="https://www.gov.uk/redundancy-your-rights/redundancy-pay" target="_blank" rel="noopener noreferrer">GOV.UK</a> explains the tax treatment in plain terms.

What if my employer refuses to pay or goes insolvent?

If your employer is insolvent, the <a href="https://www.gov.uk/claim-redundancy" target="_blank" rel="noopener noreferrer">Redundancy Payments Service</a> can make statutory redundancy payments directly from the National Insurance Fund. You apply online at GOV.UK. If your employer is solvent but refuses to pay, you can apply to the Employment Tribunal within six months of the date on which the payment should have been made.

Can I negotiate more than the statutory amount?

Yes. Statutory redundancy pay is the legal minimum. Many employers offer enhanced packages — especially in larger redundancy exercises. You are free to negotiate, and any enhanced payment above £30,000 will be taxed. If you sign a settlement agreement accepting an enhanced payment, you will usually waive your right to claim unfair dismissal. Always consider whether the settlement is fair before signing; the <a href="https://www.acas.org.uk/settlement-agreements" target="_blank" rel="noopener noreferrer">ACAS guide on settlement agreements</a> explains the process.

Sources

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