Breakdown
How it works
For each complete year of service you get 0.5 week's pay for years worked under age 22, 1 week for ages 22–40 and 1.5 weeks for 41+. Weekly pay is capped at the statutory limit and service at 20 years, so the maximum statutory payment is 30 weeks × the cap. The first £30,000 of any redundancy payment is tax-free.
Formula
Worked example
Age 42 with 8 years' service on £750 a week: 1 year at 41+ (1.5 weeks) + 7 years at 22–40 (7 weeks) = 8.5 weeks × £750 = £6,375 (below the £751 cap).
Frequently asked questions
What is the weekly pay cap?
£751 a week from 6 April 2026 (£719 in 2025/26). It rises every April.
Is redundancy pay taxed?
The first £30,000 of genuine redundancy pay (statutory plus enhanced) is tax-free and NI-free. Payment in lieu of notice and holiday pay are taxed as normal earnings.
Am I also owed notice pay?
Yes — statutory notice is 1 week per year of service (max 12 weeks), paid or worked, plus accrued holiday. These are on top of redundancy pay.
Can I be made redundant while on maternity leave or sick?
Yes, but with enhanced protections: those on maternity leave (and for 18 months after birth) must be offered any suitable alternative vacancy first.