Redundancy pay: how much will you get?

If redundancy has been put to you, start with the numbers you can check. Save your contract, notice, payslips and rotas today. Write down your start date, planned last day and age in each full year of service. Then ask for the written redundancy calculation and the date each part of your final pay will arrive. You are owed more than a label on a settlement sheet.

Do you qualify?

Statutory redundancy pay is not for everyone who loses work. Three tests all have to be met in England, Wales and Scotland:

1. You are an employee. Workers and self-employed people do not qualify. Agency, casual and zero-hours staff can qualify if they are employees in law. The contract’s label does not decide your status.
2. You have two years’ continuous employment. Usually with the same employer. Maternity, adoption and parental leave do not break continuity. Check the relevant end date, especially if your employer pays you instead of letting you work your notice.
3. The reason for dismissal is redundancy. Your employer has closed the business or workplace, or needs fewer employees to do work of a particular kind. A fixed-term contract’s expiry counts as a dismissal, but redundancy pay is due only if redundancy is the reason for non-renewal.

If you are unsure of your status, read our guide to employee, worker and self-employed status before accepting that you get nothing. Our guides to zero-hours contracts and agency workers cover common disputed cases. Part-time employees have the same qualifying rules, with the calculation based on their own weekly pay.

How the calculation works

The Employment Rights Act 1996 sets the formula in Great Britain. Work backwards from the “relevant date”, normally when your notice ends. For each full year, use the age band you were in throughout that year:

Only full years count. Use the 20 most recent years if you have worked longer. Add the weeks earned in each age band, then multiply by one week’s gross pay, subject to the weekly cap. Turning 41 does not move all your earlier service into the higher band.

What counts as a week’s pay?

If your hours and pay are regular, start with your normal gross weekly pay. If pay varies, use the average over the 12 weeks up to the day you received redundancy notice. Acas says to replace a whole week you did not work, for example because of holiday or sickness, with an earlier working week.

In Great Britain, Acas includes guaranteed contractual overtime and contractual bonuses or commission. Do not assume every overtime payment or discretionary bonus counts. If you are on family-related leave, use your normal contractual pay, not reduced maternity or other leave pay. Ask your employer to explain any disputed earnings in its written calculation. Care workers should keep visit and rota records; hotel housekeepers and kitchen staff, warehouse pickers and shop workers should keep payslips and hours worked. Delivery riders and drivers, cleaners and NHS support staff should keep their shift, route or rota records too. If wages for hours worked are withheld, that is wage theft. Report minimum-wage underpayment to HMRC.

Then apply the cap. For redundancies on or after 6 April 2026, the weekly limit is £751 in England, Wales and Scotland, and £783 in Northern Ireland. Earn £900 a week in Great Britain and £149 of that weekly pay does not count for the statutory calculation. Earn £500 and use £500.

Northern Ireland guidance says weekly pay includes regular overtime, bonuses and commission. Northern Ireland has its own employment legislation and annual limits. See Employment law in Northern Ireland: what differs?

What is the maximum?

The ceiling is 20 years, all at 1.5 weeks, at the capped rate:

The previous GB limits were £719 a week and £21,570 in total. These figures can change each April. An enhanced package can exceed the statutory maximum, but whether you can demand it depends on the terms of your contract or your employer’s offer.

Worked examples

These examples use the GB limits from 6 April 2026. Each assumes the stated number of full years at the relevant date and no disqualification from payment.

Your employer must give you a written statement showing the calculation. Check its service dates, age bands and weekly earnings against your records. You can cross-check using the official GOV.UK redundancy calculator.

Is redundancy pay taxed?

The first £30,000 of qualifying termination payments is normally free of income tax. Statutory redundancy pay and qualifying enhanced redundancy or severance payments share that allowance. It is not £30,000 for each part of the package. GOV.UK explains the tax treatment.

The excess above £30,000 is subject to income tax and employer Class 1A National Insurance. You do not pay employee National Insurance on qualifying termination payments, including the excess. Salary, holiday pay and notice pay follow different rules.

Notice, holiday and other money on top

Statutory redundancy pay does not replace the other money you are owed when you leave:

• Outstanding wages and any expenses due.
• Payment for accrued statutory holiday you have not taken.
• Pay during notice, or pay in lieu if your employer ends employment immediately.

The statutory notice minimum is one week after at least one month but less than two years’ service. From two years, it is one week per full year, up to 12 weeks. Your contract can give you longer notice. Read Notice periods: how much notice to give and get and When must my final pay be paid? Fixed-term contracts that expire on their agreed end date have different notice rules.

Collective redundancies can bring a separate claim. In Great Britain, employers proposing 20 or more redundancies at one establishment within 90 days must collectively consult. Consultation must begin in good time and at least 30 days before the first dismissal takes effect, or 45 days for 100 or more proposed redundancies. Failure can lead to a protective award of up to 180 days’ pay per affected employee under the rules in force from 6 April 2026. That is a maximum, not an automatic payout, and is separate from redundancy pay.

Our guides to collective consultation and redundancy rights and process explain selection, consultation and challenges to dismissal. Do not apply the GB protective-award increase to Northern Ireland.

What can take it away?

You can lose statutory redundancy pay if your employer offers to keep you on, or offers suitable alternative employment which you unreasonably refuse. An offer of a different role normally carries a four-week statutory trial period. Ask for the offer and trial dates in writing before deciding.

Suitability involves pay, hours, status, location and the work itself. Whether refusal is reasonable also depends on your circumstances. A longer commute or a shift pattern that conflicts with caring responsibilities may matter. A new job title alone does not settle the question. Get advice before refusing, leaving early or signing a settlement agreement.

Dismissal for misconduct is not a redundancy dismissal. Some groups are excluded from statutory redundancy pay, including share fishermen, certain former registered dock workers, Crown servants, armed forces and police, and domestic servants in the employer’s immediate family. The GOV.UK exceptions list also covers apprentices who are not employees at the end of training.

If you are laid off or put on short-time working, separate rules can let an eligible employee claim redundancy pay after four consecutive qualifying weeks, or six qualifying weeks within thirteen. The rules involve a written notice of intention to claim, an employer’s possible counter-notice and correctly timed notice to end employment. Do not resign first and assume payment follows. Get advice on the procedure and read our guide to lay-offs and short-time working.

If your employer cannot pay

If your employer is insolvent, you may be able to claim statutory redundancy pay and certain unpaid wages, holiday and notice payments from the government, subject to statutory limits. In Great Britain, apply through the Insolvency Service’s Redundancy Payments Service. Its payment guidance explains the process. An enhanced contractual top-up is not covered simply because it appears in your redundancy offer.

In Northern Ireland, use the separate government route linked from nidirect’s redundancy guidance. Do not assume the GB application covers you.

How long do you have, and when must it be paid?

In Great Britain, Acas says payment should be made when employment ends or on your final payday. A later date can be agreed in writing. Ask for the payment date and calculation before you leave. Northern Ireland guidance says payment normally arrives on the last day of notice, shortly afterwards or on the next payday.

If the money does not arrive, write to your employer requesting payment and keep a copy. Act within six months of your job ending. The statutory redundancy-pay deadline is longstanding. Do not confuse it with time limits for challenging the dismissal itself, and do not let an internal complaint run down your time to claim.

If you need to bring a claim, contact Acas promptly in Great Britain about early conciliation, or the Labour Relations Agency in Northern Ireland about the applicable conciliation and tribunal procedure. Unpaid statutory redundancy disputes go to an employment tribunal in Great Britain or an Industrial Tribunal in Northern Ireland. Read our guide to bringing an employment tribunal claim and get advice immediately if the six-month point has already passed. Ask your union for help: USDAW represents many retail workers, Unite workers in hospitality and logistics, UNISON and GMB workers in care and health, and IWGB delivery workers. If you are not a member, try Citizens Advice or a local law centre. Do not assume that writing to HR pauses your deadline.

What is in force, and what is scheduled?

The government’s implementation timetable separates current rules from future changes. Employment Rights Act 2025 reforms discussed here apply to Great Britain, not Northern Ireland. Future dates remain subject to parliamentary processes.

1. 6 Apr 2026In force: new caps and a higher GB protective award

   Weekly redundancy-pay caps are £751 in GB and £783 in NI. In GB, the maximum protective award for failing to collectively consult has doubled to 180 days’ pay.

2. 1 Oct 2026In force: longer GB tribunal time limits

   The general employment tribunal claim limit has increased from three to six months. The timetable gives 9 November 2026 for the corresponding change to breach-of-contract claims in Scotland. Statutory redundancy-pay claims already had a six-month deadline. Check which limit and transitional rules apply to your claim.

3. 1 Jan 2027Scheduled: wider ordinary unfair-dismissal protection

   The qualifying period is due to fall to six months for dismissals from this date, with compensatory awards uncapped. Fire-and-rehire protections are separately scheduled for January 2027. Neither changes the two-year redundancy-pay threshold.

A further collective-consultation threshold change is scheduled for 2027, with details still to be settled. Do not use an unconfirmed organisation-wide number to decide whether your employer must consult now. Our Employment Rights Act 2025 guide tracks the reforms.