What this estimator works out
This estimator multiplies a weekly pay figure by the number of eligible weeks you have accrued, then applies any enhancement your employer offers above the statutory minimum.
It is deliberately simple, and it needs you to supply the eligible weeks rather than working them out for you. That is because statutory redundancy pay depends on your age in each year of service, and applies caps that change annually. The method section explains how to find your figure.
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Before you estimate
- Check your contract or staff handbook first. Many employers offer enhanced redundancy terms well above the statutory minimum, in which case the statutory calculation is the floor rather than the answer.
- Work out your eligible weeks using the age bands set out below, or use the official calculator on GOV.UK.
- Apply the statutory weekly pay cap if you are calculating the statutory entitlement. Pay above the cap does not increase statutory redundancy pay.
- Remember that only complete years of continuous service count, up to a maximum of 20.
For each complete year of service you generally receive half a week's pay for years worked under 22, one week's pay for years worked between 22 and 40, and one and a half weeks' pay for years worked from 41 onwards. Service is capped at 20 years and weekly pay is capped at a statutory maximum.
How this calculator works
The calculation itself is straightforward once you have the eligible weeks:
Base payment = weekly pay × eligible weeks
Total = base payment × (1 + enhancement %)To find your eligible weeks, count each complete year of continuous service and weight it by your age during that year: 0.5 weeks for years under 22, 1 week for years from 22 to 40, and 1.5 weeks from 41. Add them together, counting a maximum of 20 years, working backwards from your leaving date.
For the statutory calculation, use the statutory weekly pay cap rather than your actual weekly pay if your pay exceeds it. For an enhanced contractual scheme, your employer's own rules apply and often use uncapped actual pay.
Worked example: 12 eligible weeks
Using the default figures — £600 weekly pay, 12 eligible weeks and no enhancement:
- Base payment: £600 × 12 = £7,200
- With no enhancement, the total is £7,200
Twelve eligible weeks would arise, for example, from twelve complete years of service all worked between the ages of 22 and 40. The same twelve years worked from age 41 onwards would give eighteen weeks and £10,800 — a 50% difference from age alone. If your employer offers a 50% enhancement on top, the figure becomes £10,800 or £16,200 respectively. This is why checking your contract before accepting a figure matters.
Common mistakes
- Ignoring the statutory weekly pay cap. For statutory purposes, pay above the cap does not count.
- Counting partial years. Only complete years of continuous service qualify.
- Forgetting the 20-year limit. Service beyond 20 years does not increase the statutory entitlement.
- Assuming statutory is all you will get. Many contracts are more generous, and enhanced terms are sometimes negotiable.
- Confusing redundancy pay with notice pay. They are separate entitlements and both may be due.
Frequently asked questions
Is redundancy pay taxable?
Genuine redundancy payments are generally tax-free up to £30,000. Anything above that is taxable, and payments in lieu of notice, accrued holiday pay and bonuses are taxable in full regardless. Because the £30,000 threshold has been unchanged for many years, larger enhanced packages frequently exceed it.
Do I qualify for statutory redundancy pay?
Generally you need at least two years of continuous service as an employee, and the dismissal must genuinely be by reason of redundancy. Agency workers, the self-employed and some other categories are treated differently. If you are unsure whether your situation qualifies, ACAS and Citizens Advice can both advise free of charge.
What if my employer is insolvent?
You may be able to claim statutory redundancy pay, notice pay, unpaid wages and holiday pay from the Redundancy Payments Service, which is a government scheme. Amounts are subject to statutory caps. Apply through GOV.UK; the insolvency practitioner should give you a case reference.
Can I challenge a redundancy?
Redundancy must be genuine and the process must be fair, including proper consultation and a reasonable approach to selection and to alternative employment. If you believe the process was unfair or the reason was not genuine, seek advice quickly — employment tribunal time limits are short, usually three months less one day, and early conciliation through ACAS is normally required first.
What should I do first if I have been told I am at risk?
Get the numbers straight and get advice early. Check your contract for enhanced terms, request a written breakdown of the proposed payment, and contact ACAS on their free helpline or Citizens Advice. Then use the Redundancy Survival Planner to work out how long the payment plus your savings would actually cover.
Related tools
References
- GOV.UK — statutory redundancy pay, the weekly pay cap, the official calculator and the Redundancy Payments Service
- MoneyHelper — guidance on managing money through redundancy
Sources are checked at publication and can change — how I choose and check references.