How redundancy pay is calculated

Statutory redundancy pay is a number of weeks’ pay multiplied by your weekly pay. The number of weeks depends on your age in each year of service, up to 20 years. Your weekly pay is your average over the 12 weeks before the day you were given notice, capped at £751 for redundancies on or after 6 April 2026, so the most anyone can get is £22,530. You need two years’ continuous service to qualify.

Step 1: count your full years

Count only complete years with your employer, up to a limit of 20. If you have worked 8 years and 11 months, you have 8 full years. Service has to be continuous, and in the public sector a move between some employers can keep your clock running. The continuous service guide explains when it does.

Step 2: give each year its weeks

For each full year, the number of weeks depends on how old you were during that year:

Your age during the year	Weeks’ pay for that year
Under 22	half a week
22 or older, under 41	one week
41 or older	one and a half weeks

Someone aged 48 with 12 years’ service has their earlier years counted at the 22 to 40 rate and the later ones at the 41 or older rate.

Step 3: find your weekly pay

GOV.UK defines weekly pay as the average you earned per week over the 12 weeks before the day you got your redundancy notice. Add up what you were paid over those 12 weeks and divide by 12. The date that matters is the notice date, not your last day. If your hours or pay dropped in those 12 weeks, the average drops with them.

If your result is above £751, use £751. For example, a person on £900 a week works from £751. Below the cap, use your own figure. The take-home pay calculator works from annual pay, so convert carefully if you want a rough check from your salary.

Three worked examples

These are hypothetical, and use the 2026/27 cap.

Say you are 33, have 6 full years’ service and average £600 a week. All six years are in the 22 to 40 band, so you get 6 weeks’ pay: 6 x £600 = £3,600.

Say you earn £900 a week, are 36 and have 10 full years, all after age 22. The cap brings your weekly pay down to £751, so 10 x £751 = £7,510.

Say you are 48 with 12 full years’ service, all in the same job since age 36. Five of those years fall in the 22 to 40 band (five weeks) and seven in the 41 or older band (ten and a half weeks), a total of 15.5 weeks. At £700 a week that is £10,850.

At the top end, 20 years at age 41 or over, 1.5 weeks for each, comes to 30 weeks. At £751 that is the £22,530 maximum.

What the calculation does not include

Statutory pay is a floor. NHS, council, Civil Service and many other public sector employers have their own schemes, which can use different formulas and a different pay cap. Check which one applies to you before you assume the statutory figure is what you will receive. The NHS redundancy pay guide shows how one scheme sits alongside the statutory minimum, and your HR department should give you a written estimate.

Notice pay is separate. GOV.UK says statutory notice is one week if you have between one month and two years’ service, one week for each year of service between 2 and 12 years, and 12 weeks if you have 12 years or more. Your contract can give you more but not less. Pay for notice is based on the 12 weeks before the notice period starts. The notice periods guide goes through it.

Tax and deadlines

Statutory redundancy pay under £30,000 is not taxable, according to GOV.UK. A termination payment can also include holiday pay, unpaid wages and bonuses, and what you pay tax on depends on what is in it, so see the redundancy pay tax guide.

You have 6 months from the date your job ends to apply for statutory redundancy pay. You do not qualify if your employer offers to keep you on, or offers suitable alternative work that you refuse without good reason. GOV.UK has an official calculator if you want to check your sums, and the redundancy rights guide covers consultation and selection. ACAS and Citizens Advice can help if you think the figure is wrong.