Redundancy Pay Calculator 2026 (Statutory & Enhanced)

Use this calculator to work out both statutory and enhanced redundancy pay for an employee being made redundant. Switch between statutory rates and enhanced packages with custom multipliers.

How Redundancy Pay is Calculated

Statutory redundancy pay is based on three factors:

1. Age - different rates apply for different age bands
2. Length of service - up to 20 years counted
3. Weekly pay - capped at £751 (2026-27)

Rates by Age

Age During Service	Rate
Under 22	0.5 week's pay per year
22 to 40	1 week's pay per year
41 and over	1.5 weeks' pay per year

Example Calculation

Employee aged 45 with 10 years service earning £600/week:

• Years aged 41+: 4 years × 1.5 = 6 weeks
• Years aged 22-40: 6 years × 1 = 6 weeks
• Total: 12 weeks × £600 = £7,200

Key Limits

Limit	Amount (2026-27)
Maximum weekly pay	£751
Maximum years counted	20 years
Maximum statutory redundancy	£22,530

Qualifying Criteria

To qualify for statutory redundancy pay, an employee must:

• Have 2+ years continuous service
• Be an employee (not self-employed or agency worker)
• Be genuinely redundant (role no longer exists)

Enhanced Redundancy Pay

Many employers offer enhanced redundancy packages that exceed the statutory minimum. This calculator can model enhanced schemes.

Common Enhancements

Enhancement	Statutory	Enhanced Example
Weekly pay cap	£751	No cap (actual salary)
Age 22-40 multiplier	1 week per year	2-3 weeks per year
Age 41+ multiplier	1.5 weeks per year	3-4.5 weeks per year
Years counted	Max 20 years	All years of service
Additional payments	None	Notice pay, ex-gratia, etc.

Enhanced Redundancy Examples

Example 1: 2x Statutory

Employee: Age 45, 15 years service, £1,200/week (uncapped)

Statutory:

• Years 22-40: 4 × 1 × £751 = £3,004
• Years 41+: 11 × 1.5 × £751 = £12,391.50
• Total: £15,395.50 (under £22,530 statutory cap)

Enhanced (2x multiplier, no cap):

• Years 22-40: 4 × 2 × £1,200 = £9,600
• Years 41+: 11 × 3 × £1,200 = £39,600
• Total: £49,200

Example 2: 1.5x Statutory

Employee: Age 50, 25 years service, £900/week (uncapped)

Statutory:

• Max 20 years counted, £751 cap
• Years 22-40: 9 × 1 × £751 = £6,759
• Years 41+: 11 × 1.5 × £751 = £12,391.50
• Total: £19,150.50

Enhanced (1.5x multiplier, no cap, all years):

• Years 22-40: 9 × 1.5 × £900 = £12,150
• Years 41+: 16 × 2.25 × £900 = £32,400
• Total: £44,550

How to Use Enhanced Calculator

1. Select "Enhanced" mode in the calculator
2. Enter your actual weekly pay (no need to cap at £751)
3. Choose multiplier (check your contract - typically 1.5x, 2x, or 3x)
4. Enter all years of service (not limited to 20)
5. Calculator shows both statutory and enhanced amounts

Where to Find Your Enhanced Terms

Check these documents:

• Employment contract - may reference redundancy scheme
• Company handbook - redundancy policy section
• Redundancy policy - standalone document
• Collective agreement - if unionized workplace
• Ask HR - request written confirmation of terms

Enhanced vs Voluntary Redundancy

Enhanced redundancy: Improved standard terms for all redundancies

Voluntary redundancy: May offer additional incentives:

• Further enhanced payments
• Extended notice periods
• Outplacement support
• Pension enhancements

See: Voluntary Redundancy Guide

Tax Treatment

• First £30,000: Tax-free
• Above £30,000: Subject to income tax
• National Insurance: Not payable on statutory redundancy

Note: Contractual redundancy pay above statutory is also tax-free up to the £30,000 threshold.