Redundancy Pay Calculation

Statutory redundancy pay is calculated using a formula based on three factors:

1. Your age during each year of service
2. Your complete years of continuous service (up to a maximum of 20 years)
3. Your weekly pay, capped at the statutory weekly pay cap (reviewed each April)

The age-based multipliers are:

• Each year of service aged 41 or over: 1.5 weeks' pay
• Each year of service aged 22 to 40: 1 week's pay
• Each year of service aged under 22: 0.5 weeks' pay

The government's redundancy pay calculator on GOV.UK will calculate your entitlement automatically once you enter your date of birth, start date, end date, and weekly pay. The maximum statutory redundancy pay is 30 weeks at the weekly pay cap — currently £30 x the current cap per year. Check GOV.UK for the current cap figure.

For redundancy pay purposes, "a week's pay" means your gross regular weekly pay, subject to the cap. How it is calculated depends on how you are paid:

• Fixed hours and pay: Your regular gross weekly salary (or daily rate × days per week).
• No fixed hours (variable pay): Average weekly pay over the 12 weeks immediately before the calculation date (the date you are given notice). Weeks without pay are excluded and earlier weeks are used instead.
• Shift workers with irregular hours: Similar average over 12 weeks.

The week's pay figure is then capped at the statutory maximum (currently reviewed each April). For 2025–26, check the current cap on GOV.UK. The cap has increased significantly in recent years — it is worth verifying the figure applies to your termination date.

Your employer may offer enhanced redundancy pay above the statutory minimum — either through your employment contract, a collective agreement, or discretionary policy. If a contractual redundancy scheme exists, your employer must honour it. If they offer a discretionary enhanced amount in exchange for signing a settlement agreement, you are under no obligation to accept their first offer.

If you believe you have been underpaid statutory redundancy pay, you can:

• Write to your employer requesting a breakdown of the calculation
• Use the GOV.UK redundancy pay calculator to check the figure independently
• Bring a claim in the Employment Tribunal within six months of the date your employment ended

If your employer is insolvent and cannot pay, apply to the Redundancy Payments Service (administered by the Insolvency Service) for payment from the National Insurance Fund. The RPS can pay statutory redundancy pay, arrears of pay, notice pay, and accrued holiday pay up to statutory limits.