🇬🇧UK Redundancy Pay Calculator

Estimate your redundancy pay based on UK employment law. Includes statutory redundancy, enhanced packages, and the \u00A330,000 tax-free allowance.

Free Redundancy Pay Calculator | UK

Estimate your redundancy package based on UK employment law, your salary, years of service, and industry

Understanding UK Redundancy Pay

In the UK, employees with 2 or more years of continuous service are entitled to statutory redundancy pay when made redundant. Many employers offer enhanced redundancy packages above the statutory minimum.

Statutory Redundancy Pay

Under 22: 0.5 weeks' pay per year of service
22-40: 1 week's pay per year of service
41+: 1.5 weeks' pay per year of service

Weekly pay is capped at \u00A3643 (2024/25), and maximum 20 years of service are counted. This means statutory redundancy is capped at approximately \u00A319,290.

Tax-Free Allowance

The first \u00A330,000 of a genuine redundancy payment is tax-free. This is one of the most generous tax treatments for redundancy pay globally. Amounts above \u00A330,000 are taxed as income and are also subject to National Insurance.

Settlement Agreements

If your employer offers a settlement (formerly compromise) agreement, you must receive independent legal advice from a qualified solicitor before signing. Your employer is expected to contribute to your legal costs (typically \u00A3500+). You should have at least 10 calendar days to consider any offer.

Frequently Asked Questions: UK Redundancy

How much statutory redundancy pay am I entitled to?

Statutory redundancy pay depends on your age, weekly pay (capped at £643), and years of service (max 20 years). Under 22: 0.5 weeks/year, 22-40: 1 week/year, 41+: 1.5 weeks/year. Maximum statutory payout is approximately £19,290.

Is redundancy pay taxed in the UK?

The first £30,000 of genuine redundancy pay is tax-free. Amounts above £30,000 are subject to income tax and, from April 2020, employer National Insurance contributions. Contractual redundancy pay above the tax-free amount is taxed as earnings.

What is a settlement agreement?

A settlement agreement (formerly compromise agreement) is a legally binding contract between employer and employee. You waive your right to make certain claims in exchange for a financial settlement. You must receive independent legal advice before signing, paid for by your employer.

How long do I have to consider a redundancy offer?

The ACAS Code of Practice recommends employers give at least 10 calendar days for you to consider a settlement agreement. There is no strict legal minimum, but tribunals look unfavourably on employers who pressure employees to sign quickly.

For educational and informational purposes only, not legal advice. Results are estimates, not a guarantee. Consult a licensed employment attorney about your specific situation.