Calculating your redundancy pay
How much redundancy pay you get depends on your wage, how long you have worked at the company and your age. If you are trying to work out your redundancy payment, find out how it is calculated or use the online calculator.
Contractual redundancy pay
You should check your employment contract for how much redundancy pay you are entitled to. Some employers offer employees more generous packages than the statutory minimums as part of their employment benefits.
Your employer cannot offer you less than the statutory minimum through your employment contract.
Statutory redundancy pay
The calculation for your statutory redundancy pay is based on:
- how long you have been continuously employed
- your age
- your weekly pay, up to a certain limit (£400 current maximum)
You will get:
- 0.5 weeks pay for each full year of service where your age was under 22
- 1 weeks pay for each full year of service where your age was 22 or above, but under 41
- 1.5 weeks pay for each full year of service where your age was 41 or above
For example: If you are 45, your weekly pay is £400 per week and you have completed 15 years full service, you will receive £6,800 statutory redundancy pay.
Step one: 1.5 weeks x 4 years full service when you were 41 or above = 6 weeks
Step two: 1 week x 11 years service when you were under 41 = 11 weeks
Step three: 6 weeks + 11 weeks = 17 weeks x £400 (max weekly wage) = £6,800 statutory redundancy pay
The online calculator can help work out how much statutory redundancy pay you might be entitled to.
Relevant end date for your years of service
The number of weeks redundancy pay you should receive is worked out up until a set relevant date. It is important to know when this date is so you can work out how many full years of continuous service you have.
The 'relevant date' can be a number of dates.In most cases it will be the date when your employment ends (e.g. the last day of your notice period). In some situations it will be different:
- if your employer gave you a statutory notice period until a set date,then changed your notice period to finish earlier - the relevant date will be when your notice should have finished before it changed
- if you are on a trial period for another position within the company and your employer lets you go because the work is not suitable the relevant date would be when your original contract ended before the trial period
- if you do not have a statutory notice period (e.g. because of a payment in lieu arrangement) the relevant date would be when your employment contract would have ended if you had a statutory notice period
Redundancy pay under £30,000 is not taxable. More information on whether elements of the payment, such as pay in lieu of notice (PILON), is taxable is available from HM Revenue and Customs. Pay in lieu of notice is money paid to you by your employer as an alternative to being given your full notice.
Where to get help
If you are being denied your rights, talk to your employer first of all. If you have an employee representative (e.g. a trade union official), they may be able to help. If this doesn't work, you may need to make a complaint using your employer's internal grievance procedure.
For more information on where to get help with redundancy contact Acas (the Advisory, Conciliation and Arbitration Service) or peak to Contact Law to be matched to an employment solicitor in your local area.
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