UK Statutory Redundancy Pay — 2025/26 rates
Weekly pay is capped at £643 (2025/26). Service is capped at 20 years. The first £30,000 is tax-free.
If you've worked for your employer for at least 2 years and are made redundant, you are legally entitled to statutory redundancy pay. The amount depends on your age, your length of service (capped at 20 years), and your weekly pay (capped at £643 for 2025/26).
The formula gives you: 0.5 week's pay for each full year of service under age 22, 1 week's pay for each full year aged 22–40, and 1.5 weeks' pay for each full year aged 41 or over.
Redundancy pay is calculated using three factors: your age at each point in your employment, the number of complete years of continuous service (max 20), and your gross weekly pay capped at £643 (2025/26 rate). Each year of service earns 0.5, 1, or 1.5 weeks' pay depending on how old you were during that year. The multiplier is 1.5 if you were 41 or over, 1.0 if 22–40, and 0.5 if under 22.
The maximum is 30 weeks of pay at the weekly cap. In 2025/26 that cap is £643 per week, making the absolute maximum £19,290. You'd reach this by having 20 years of service all aged 41 or over (20 × 1.5 = 30 weeks). The weekly pay cap is reviewed each April by the government.
The first £30,000 of redundancy pay is completely tax-free and exempt from National Insurance. This includes both statutory redundancy pay and any enhanced (ex-gratia) payment from your employer. Any amount above £30,000 is taxed as income in the normal way. Payment in lieu of notice (PILON), however, is fully taxable regardless of the total amount.
Many employers offer "enhanced redundancy pay" above the statutory minimum — this may be a set multiple of the statutory amount or based on your actual salary without the cap. Any enhanced amount is still covered by the £30,000 tax exemption. Check your employment contract or company redundancy policy for details.
You can be refused statutory redundancy pay if you have less than 2 years' continuous service, if you unreasonably refused suitable alternative employment offered by your employer, or if you were dismissed for gross misconduct. If you believe you've been wrongly denied redundancy pay, you can make a claim to an Employment Tribunal within 6 months of your dismissal date.