Redundancy Pay Calculator UK 2026: Work Out What You Are Owed

Redundancy pay calculator UK searches spike the moment someone reads the words “at risk of redundancy” in an email. It is a horrible feeling, and the first thing most people want is a number: how much am I actually going to get, and how long will it last? The problem is that the official calculators ask for details you may not have to hand, and the answer they give you is only the statutory minimum. Your contract, your notice period and your employer’s own redundancy scheme can all push the figure up. This guide walks you through the 2026/27 rules step by step, shows you the exact sums with worked examples, and flags the extras people routinely forget to claim.

A redundancy pay calculator UK workers can trust uses three inputs: your age, your full years of continuous service (capped at 20), and your weekly pay (capped at £751 from 6 April 2026 in England, Scotland and Wales). You get half a week’s pay per year worked under 22, one week per year aged 22 to 40, and 1.5 weeks per year aged 41 or over. The maximum statutory payment is £22,530.

How a Redundancy Pay Calculator Works

Every redundancy pay calculator UK employees use, including the official one on GOV.UK, runs the same simple formula behind the scenes. It multiplies your capped weekly pay by a multiplier that depends on your age in each year of service.

The formula is: weekly pay (capped) × the sum of your age-banded years = statutory redundancy pay. Nothing else feeds into it. Your job title, your performance, your seniority and how long you were on furlough years ago make no difference at all.

That is why two people made redundant on the same day from the same team can walk away with wildly different amounts. A 52-year-old with 18 years’ service will receive several times what a 27-year-old with three years’ service gets, even if they were on identical salaries.

The three inputs you need

1. Your age on the date your employment ends, and your age during each year of service.
2. Your full years of continuous service, counted backwards from your leaving date. Part years are ignored.
3. Your gross weekly pay, averaged over the 12 weeks before you received your redundancy notice, capped at £751.

Do You Qualify for Redundancy Pay?

You are entitled to statutory redundancy pay if you are an employee, you have at least two years’ continuous service, and your job is genuinely being made redundant. That last part matters: redundancy means the role is disappearing, the workplace is closing, or fewer people are needed to do that kind of work.

Agency workers, the genuinely self-employed and most contractors working outside the payroll do not qualify. If you are unsure which category you sit in, our guide to UK employment contracts explained sets out the difference between employee, worker and self-employed status and why it changes your rights.

You also lose your entitlement if you unreasonably turn down a suitable alternative job that your employer offers you, or if you are dismissed for gross misconduct rather than made redundant.

What counts as continuous service

Continuous service runs from your official start date to the date your employment ends, including your statutory notice period. Sick leave, maternity leave, parental leave and periods of furlough all count.

Crucially, if your employer pays you in lieu of notice, the calculation should still use the date your employment would have ended had you worked out your statutory notice. That can tip you over into an extra qualifying year and add hundreds of pounds.

Working Out Your Weekly Pay

Your weekly pay is your average gross weekly earnings over the 12 weeks immediately before the day you were given redundancy notice. Gross means before tax and National Insurance.

If your pay varies week to week, because of shifts, commission or piece work, you take the average across those 12 weeks. Weeks where you earned nothing are skipped and replaced by earlier weeks so you are not penalised.

Overtime only counts if it is contractual, meaning your employer is obliged to offer it and you are obliged to work it. Purely voluntary overtime, in most cases, does not count towards the statutory figure even though it counts for holiday pay.

The weekly cap for 2026/27

From 6 April 2026 the statutory cap on a week’s pay rose from £719 to £751 in England, Scotland and Wales. In Northern Ireland the equivalent cap is £783.

If you earn £1,200 a week, the calculator still uses £751. This is the single biggest reason higher earners feel short-changed by statutory redundancy pay, and the main reason to check whether a contractual scheme applies to you.

If you earn less than the cap, your actual average weekly pay is used. If you are not sure what your gross weekly figure is, our walkthrough on how to read a UK payslip shows you exactly which line to take it from.

The Age Bands Explained

This is the part that confuses most people. The multiplier is not based on your age today. It is based on how old you were during each individual year of service.

You work backwards from your leaving date, year by year, applying the band that matched your age in that year. Only the most recent 20 years count, so service beyond two decades is ignored.

Someone who joined at 19 and leaves at 45 with 26 years’ service will only be credited for the last 20 of those years, and the earliest of those 20 will fall into the 22 to 40 band rather than the under-22 band.

Three Worked Examples

Example 1: Priya, 29, four years’ service, £620 a week

Priya is under the £751 cap, so her actual weekly pay is used. All four of her qualifying years fall in the 22 to 40 band, giving her four weeks’ pay.

4 × £620 = £2,480 statutory redundancy pay, paid tax free. On top of that she is owed her notice pay and any untaken holiday.

Example 2: Mark, 47, 12 years’ service, £900 a week

Mark earns above the cap, so his weekly pay is treated as £751. He turned 41 six years ago, so six years attract 1.5 weeks and the earlier six attract one week.

(6 × 1.5) + (6 × 1) = 9 + 6 = 15 weeks. 15 × £751 = £11,265 statutory redundancy pay.

Note how much Mark loses to the cap. On his true weekly pay the figure would have been £13,500. That £2,235 gap is exactly what an enhanced company scheme would typically close.

Example 3: Denise, 58, 24 years’ service, £780 a week

Denise is capped at £751 and capped at 20 years of service. She turned 41 seventeen years ago, so 17 years attract 1.5 weeks and the remaining three qualifying years attract one week.

(17 × 1.5) + (3 × 1) = 25.5 + 3 = 28.5 weeks. 28.5 × £751 = £21,403.50. She is close to, but just under, the £22,530 statutory maximum, which is reached at 30 weeks.

Quick Ready Reckoner Table

Use this to sanity-check any online redundancy pay calculator UK result. The figures assume you are on or above the £751 weekly cap.

Most people land somewhere between the two columns because their service spans both age bands. If you earn under the cap, scale the figures down proportionally: multiply the table figure by your weekly pay divided by 751.

What Else You Are Owed on Top

Statutory redundancy pay is only one line in your final settlement. Missing the others is the most expensive mistake people make.

• Statutory notice pay: one week per full year of service, up to a maximum of 12 weeks. Your contract may give you more, and if it does, the contractual figure wins.
• Accrued untaken holiday: paid at your normal rate, pro-rated to your leaving date.
• Outstanding commission, bonus or shift premiums already earned.
• Contractual redundancy pay: anything your employer’s own scheme promises above the statutory floor.
• Pension contributions due during the notice period.
• Reasonable paid time off to look for work, once you are under notice of redundancy.

Tax on Redundancy Pay in 2026/27

Statutory redundancy pay is free of income tax and National Insurance. The first £30,000 of your total termination package is also tax free, and this allowance covers your statutory payment plus any ex-gratia or enhanced element.

Anything above £30,000 is taxed at your marginal rate. Notice pay is different: payments in lieu of notice are always taxable and subject to National Insurance, no matter how they are labelled in the settlement letter.

Because a lump sum can push you temporarily into a higher tax band or trigger an emergency code, it is worth checking your code after payment. Our guide to UK tax codes explained covers how to spot a wrong code and reclaim overpaid tax.

The 2026/27 thresholds that apply to the taxable slice are the standard ones: a £12,570 personal allowance, 20% basic rate to £50,270, 40% higher rate to £125,140, and 45% above that. If you leave part-way through a tax year, you may well be due a refund.

Enhanced and Contractual Schemes

Plenty of UK employers pay more than the statutory minimum. Enhanced schemes typically do one or more of the following:

1. Remove the weekly cap, so your real salary is used instead of £751.
2. Increase the multiplier, for example two or three weeks’ pay per year of service.
3. Remove the 20-year limit, rewarding very long service.
4. Add a flat lump sum on top of the service-based calculation.

Check your contract, staff handbook, intranet policy page and any collective agreement with a recognised union. If a scheme has been paid consistently in past redundancy rounds, it may have become contractual by custom and practice even if it is not written down.

2026 Rule Changes You Should Know About

The Employment Rights Act 2025 is being phased in across 2026 and 2027, and some of it directly affects redundancy processes.

From April 2026 the maximum protective award for failing to consult collectively doubled from 90 days’ pay to 180 days’ pay per affected employee. That is a substantial deterrent, and it means employers have a much stronger financial reason to run consultation properly.

The existing trigger for collective consultation stays in place: 20 or more proposed redundancies at one establishment within 90 days. The government consulted through spring 2026 on adding an organisation-wide threshold, which is expected to come into force in 2027 alongside a new statutory Code of Practice.

None of this changes the amount in your statutory calculation, but it does strengthen your position if your employer skips or rushes consultation. If that happens, get advice from Acas or a union representative quickly, because employment tribunal time limits are short.

Your Step-by-Step Action Plan

1. Write down your dates. Start date, notice date, and proposed leaving date including notice.
2. Count full years backwards from the leaving date, capping at 20.
3. Note your age in each of those years and assign 0.5, 1 or 1.5 weeks accordingly.
4. Average your gross pay over the 12 weeks before notice, then apply the £751 cap if relevant.
5. Multiply and compare your answer with the official GOV.UK calculator.
6. Add notice pay, holiday and any enhancement to get your true total.
7. Check the tax treatment of anything above £30,000 and of any payment in lieu of notice.
8. Challenge the figure in writing if it does not match, before you sign a settlement agreement.

Redundancy is also, for a lot of people, the nudge into a better-paid field. If you are considering retraining while you have a lump sum and some breathing space, browsing Coffee & Study’s finance and accounting courses is a low-cost way to test whether a new direction appeals before you commit to anything expensive.

Common Mistakes to Avoid

Using your current age for every year of service

This is the number one error. A 43-year-old with 10 years’ service does not get 15 weeks’ pay. Only the two years since turning 41 attract the 1.5 multiplier. Overestimating here leads to a nasty surprise when the settlement letter arrives.

Forgetting that notice extends your service

If you are paid in lieu of notice, your qualifying service should still be measured to the end of the statutory notice period. People with a service anniversary falling inside their notice window regularly lose a full year’s entitlement because nobody checks this.

Assuming the whole payment is tax free

The statutory element is tax free, and the first £30,000 of the wider package is too. But payment in lieu of notice is fully taxable and liable for National Insurance, and packages above £30,000 are taxed on the excess. Budget on the net figure, not the headline one.

Signing a settlement agreement without checking the maths

Settlement agreements usually require you to waive your right to bring claims. Once signed, disputing the calculation is very difficult. Your employer normally pays for you to get independent legal advice, so use it.

Not applying for what you are owed if the employer is insolvent

If your employer goes under, you can claim statutory redundancy pay, notice pay and holiday pay from the Redundancy Payments Service through GOV.UK. The amounts are subject to the same weekly cap, but the money does not simply vanish.

Frequently Asked Questions

How much redundancy pay will I get after 10 years?

It depends on your age during those years and your weekly pay. If all ten years fell between ages 22 and 40, you get ten weeks’ pay. At the £751 cap that is £7,510. If all ten years were after your 41st birthday, you get 15 weeks, which is £11,265 at the cap. Most people fall between the two because their service spans both bands, so calculate year by year rather than using a single multiplier.

Is redundancy pay taxed in the UK?

Statutory redundancy pay is free of income tax and National Insurance. The wider termination package is tax free up to £30,000, with anything above that taxed at your marginal rate. Payment in lieu of notice is the exception: it is always taxable and subject to National Insurance regardless of how the settlement describes it. If a lump sum triggers an emergency tax code, you can usually reclaim the overpayment from HMRC.

Do I get redundancy pay after two years?

Yes. Two years of continuous service is the qualifying threshold for statutory redundancy pay. At exactly two years, and assuming both years fell in the 22 to 40 age band, you would receive two weeks’ pay. Below two years you have no statutory entitlement, although your contract might still promise something and you keep your rights to notice pay and accrued holiday.

What is the maximum statutory redundancy payment in 2026?

The maximum is £22,530 in England, Scotland and Wales for redundancies on or after 6 April 2026. That is 30 weeks’ pay at the £751 weekly cap, which you reach with 20 years’ service all falling after your 41st birthday. Northern Ireland uses a higher weekly cap of £783, so the maximum there is correspondingly larger.

Does voluntary redundancy pay more than compulsory?

Not automatically. The statutory calculation is identical either way. In practice, employers often attach an enhanced package to voluntary redundancy to encourage take-up, so the offer can be more generous. Read the specific terms rather than assuming, and check whether accepting voluntary redundancy affects any pension entitlement or notice period.

Can I claim benefits straight after redundancy?

You can apply for New Style Jobseeker’s Allowance based on your National Insurance record, and it is not means-tested against savings or a redundancy lump sum. Universal Credit is means-tested, and a large redundancy payment sitting in your account can reduce or remove entitlement. Check both routes on GOV.UK rather than assuming you do not qualify.

Once the numbers are settled, the next job is finding your next job, and moving quickly matters more than most people expect. Browse current vacancies on the UK Jobs Alert job board to see who is hiring in your sector and area right now, and use the notice period you are being paid for to get applications out while you still have income coming in.