UK Redundancy Pay Calculator

The first £30,000 of redundancy pay is free of Income Tax and National Insurance, so statutory redundancy pay on its own is always tax-free. That £30,000 covers statutory pay and any extra your employer pays, plus non-cash benefits such as a company car you keep. Anything over £30,000 is taxed as income at your usual rates, with no National Insurance for you (your employer pays 15% employer National Insurance instead). For example, on £60,000 of redundancy pay, £30,000 is tax-free and the other £30,000 is taxed: £6,000 if it all falls in the 20% band, or £12,000 if it all falls in the 40% band. Notice pay, holiday pay and wages owed are taxed like normal pay and don’t use up the £30,000.

You qualify if you’re an employee and have worked for the same employer for at least 2 full years by the day your job ends. You may lose it if you turn down a suitable alternative job your employer offers without a good reason, and being dismissed for misconduct isn’t redundancy. The self-employed don’t get it, and some groups, such as the armed forces, the police and Crown servants, aren’t covered by the statutory scheme.

It’s your gross pay for a normal working week, before tax and National Insurance. If your pay varies, for example with shifts or commission, it’s the average over the 12 weeks up to the day you were given notice. If you’ve chosen annual salary, the calculator divides it by 52. Whatever the figure, it’s capped (see the next question).

A week’s pay counts for at most £751 in England, Scotland and Wales, and £783 in Northern Ireland, for jobs ending on or after 6 April 2026 (it was £719 and £749 before that). So the most statutory redundancy pay can be is £22,530 in Great Britain and £23,490 in Northern Ireland. The cap usually rises each April.

Each full year of service earns half a week’s pay for a year you were under 22, one week for a year you were 22 to 40, and one and a half weeks for a year you were 41 or over. A year counts at the rate for the age you were for all of it, so the year in which you had a birthday counts at your age before it. The table shows how each of your years was counted.

Only your last 20 full years count, counting back from the day your job ends. Earlier years add nothing to statutory redundancy pay, so the most anyone can get is 30 weeks’ pay. Your employer’s own scheme may count more.

Pay in lieu of notice, holiday pay you’re owed, unpaid wages and bonuses are taxed like normal pay, with Income Tax and National Insurance. They don’t use up any of the £30,000 tax-free amount. Holiday you’ve built up but not taken must be paid when you leave; the calculator values a day as a fifth of your weekly pay.

Yes, if your employer agrees. Your employer pays some or all of your redundancy pay into your pension instead of paying it to you. That part has no Income Tax or National Insurance, and it doesn’t use up any of the £30,000 tax-free amount, so it saves most when your redundancy pay is over £30,000. It has to be agreed before you’re paid. It counts towards your pension annual allowance, which is £60,000 for most people and includes what your employer pays in; you may be able to carry forward allowance you didn’t use in the last 3 tax years. Notice pay, holiday pay and wages can’t be swapped for a pension payment this way. Enter the amount as “Paid into your pension” under “Your whole package”.

No. Student and postgraduate loan repayments come out of the same pay that National Insurance is worked out on, and redundancy pay has no employee National Insurance, so nothing is repaid from it. They are taken from pay in lieu of notice, holiday pay and wages owed: 9% of pay over your plan’s yearly threshold, and 6% over £21,000 for a Postgraduate Loan. The calculator works them out over the tax year, like the tax. Payroll works them out per pay period, so a large final payslip can have more taken in one go; if your income for the whole tax year ends up under your plan’s threshold, you can ask the Student Loans Company for a refund.

The calculator works out the extra tax on your pay so far this tax year once the taxed parts of your payout are added, as if you earned nothing more this year. Your employer takes tax off through payroll using your tax code at the time, so the amount actually taken may be more or less. HMRC sorts out any difference after the tax year ends, or through your new job’s tax code. National Insurance is worked out over the year, while payroll works it out per pay period.

By law your employer must give you at least 1 week’s notice if you’ve worked there between a month and 2 years, then 1 week for each full year, up to 12 weeks. Your contract may give you more, and you get whichever is longer. If your employer pays you instead of letting you work your notice, tick the box under “Your whole package”.

If your employer is insolvent or refuses to pay, you can apply to the government’s Redundancy Payments Service. It pays statutory redundancy pay, and some notice pay, holiday pay and wages owed, up to set limits. In Northern Ireland, nidirect explains how to claim.

Yes. If your employer hasn’t paid, you must claim within 6 months of the day your job ended, by writing to your employer or applying to an employment tribunal. Acas can help first, through early conciliation. Don’t wait: a late claim may be refused.

It covers statutory redundancy pay and the tax on a simple payout. It doesn’t know your employer’s own redundancy scheme, so enter anything extra as an amount. It doesn’t cover unfair dismissal claims, settlement agreements, pension tax charges or part-time holiday patterns. The qualifying period for unfair dismissal is due to fall to 6 months from 1 January 2027, but that doesn’t change the 2-year rule for redundancy pay.