If you’ve been employed continuously for 2 or more years and are made redundant, you’re legally entitled to statutory redundancy pay. The amount depends on your age, length of service and weekly pay.
How It’s Calculated
For each complete year of service: 0.5 weeks’ pay for each year under age 22, 1 week’s pay for each year aged 22–40, and 1.5 weeks’ pay for each year aged 41+. Weekly pay is capped at £643 and service is capped at 20 years, giving a maximum statutory payment of £19,290.
Tax on Redundancy
The first £30,000 of a redundancy payment is tax-free. This includes statutory redundancy pay and any additional contractual redundancy. Amounts exceeding £30,000 are subject to income tax and NI.