Redundancy Pay UK 2026: Calculator, Tax Rules & What You're Entitled To

Chandraketu Tripathi

Finance Editor, Kaeltripton

Published 4 Apr 2026

Last reviewed 4 May 2026

✓ Fact-checked

By Chandraketu Tripathi | Updated April 2026

If you've been made redundant, your first question is almost certainly: how much will I get? UK statutory redundancy pay is a legal right for employees with 2+ years of service, calculated using a government formula based on your age, service length, and weekly pay. From 6 April 2026, the weekly pay cap rose to £751 — the first increase since April 2025 — making the maximum statutory payment £22,530.

Key Facts

Weekly pay cap from 6 April 2026: £751 | Maximum statutory payment: £22,530 | Tax-free threshold: £30,000 | Minimum service required: 2 years | Maximum service counted: 20 years

Redundancy Pay Formula UK 2026

Source: Employment Rights Act 1996, updated April 2026. Weekly pay capped at £751. Maximum 20 years service counts.
Your Age During That Year of Service	Statutory Redundancy Entitlement
Under 22	0.5 week's pay per complete year of service
22 to 40	1 week's pay per complete year of service
41 or over	1.5 weeks' pay per complete year of service

Redundancy Pay Calculator: Worked Examples 2026

Source: theemploymentlawsolicitors.co.uk, Acas. April 2026. Only complete years of service count.
Profile	Calculation	Statutory Pay
Age 30, 5 years service, £400/week	5 × 1 × £400	£2,000
Age 30, 5 years service, £900/week (over cap)	5 × 1 × £751 (capped)	£3,755
Age 45, 10 years service, £500/week	10 × 1.5 × £500	£7,500
Age 45, 10 years service, £900/week (over cap)	10 × 1.5 × £751 (capped)	£11,265
Age 50, 20 years service, £751+/week	20 × 1.5 × £751 (maximum)	£22,530
Age 25, 3 years service, £300/week	3 × 1 × £300	£900
Age 55, 15 years service, £600/week	15 × 1.5 × £600	£13,500

Statutory Redundancy Pay Table 2026 — Years of Service × Age Multiplier

To use the table: find your age group row, find your years of service column, multiply the result by your weekly pay (up to £751 cap). The table shows the number of weeks' pay you receive:

Multiply weeks × actual weekly pay (or £751 if pay exceeds cap). Source: Employment Rights Act 1996.
Years of Service	Under 22 (×0.5)	Age 22–40 (×1)	Age 41+ (×1.5)
2 years	1 week	2 weeks	3 weeks
3 years	1.5 weeks	3 weeks	4.5 weeks
5 years	2.5 weeks	5 weeks	7.5 weeks
10 years	5 weeks	10 weeks	15 weeks
15 years	7.5 weeks	15 weeks	22.5 weeks
20 years (max)	10 weeks	20 weeks	30 weeks (capped at £22,530)

Is Redundancy Pay Taxable? The £30,000 Rule

Source: HMRC, theemploymentlawsolicitors.co.uk, gte-settlementagreements.co.uk. April 2026.
Payment Type	Tax Treatment	NIC Treatment
Statutory redundancy pay (first £30,000)	Tax-free	No NIC
Enhanced/ex-gratia redundancy (within £30k combined)	Tax-free	No NIC
Any redundancy above £30,000 total	Taxed at marginal rate	No NIC (unique)
Notice pay / PILON	Fully taxable as earnings	NIC applies
Accrued holiday pay	Fully taxable as earnings	NIC applies

Tax on Large Redundancy Payments: Real Examples

Approximate. Excludes notice pay and holiday pay which are taxed separately. April 2026.
Redundancy Amount	Tax-Free	Taxable (at 20%)	Taxable (at 40%)	Net (basic rate)	Net (higher rate)
£20,000	£20,000	£0	£0	£20,000	£20,000
£30,000	£30,000	£0	£0	£30,000	£30,000
£50,000	£30,000	£4,000 tax	£8,000 tax	£46,000	£42,000
£80,000	£30,000	£10,000 tax	£20,000 tax	£70,000	£60,000
£100,000	£30,000	£14,000 tax	£28,000 tax	£86,000	£72,000

Am I Eligible for Statutory Redundancy Pay?

Must be an employee — contractors, agency workers, and self-employed are not entitled to statutory redundancy pay
At least 2 years' continuous service — with the same employer immediately before redundancy
Genuine redundancy situation — your role must be genuinely no longer needed; dismissal for misconduct or performance is not redundancy
Not have unreasonably refused suitable alternative employment — if your employer offers a suitable alternative role and you refuse it without good reason, you may lose your entitlement
Apply within 6 months — you have 6 months from your dismissal date to claim; tribunals rarely extend this

Statutory vs Enhanced Redundancy: What's the Difference?

Statutory redundancy is the legal minimum — calculated using the formula above. Many employers offer enhanced redundancy packages that exceed the statutory minimum. These typically: remove the £751 weekly pay cap (using actual salary), multiply the statutory figure (e.g. 2× or 3× statutory), add additional weeks per year of service, or include ex-gratia payments. The first £30,000 combined (statutory + enhanced + ex-gratia) remains tax-free. Settlement agreements often include enhanced redundancy in exchange for waiving certain employment rights — always seek independent legal advice before signing.

Frequently Asked Questions

How much redundancy pay will I get UK 2026?

Statutory redundancy pay is calculated using your age, years of service, and weekly pay (capped at £751 from 6 April 2026). The formula: 0.5 week's pay per year under age 22, 1 week's pay per year aged 22–40, 1.5 weeks' pay per year aged 41+. Maximum service counted: 20 years. Maximum total statutory payment: £22,530. You must have at least 2 years' continuous service to qualify.

Is redundancy pay taxable in the UK?

The first £30,000 of statutory redundancy pay is completely tax-free and exempt from National Insurance. Any redundancy payment above £30,000 is taxed as income. Note: notice pay (PILON) and accrued holiday pay are always fully taxable as employment income — they do not benefit from the £30,000 tax-free threshold.

What is the 70/30 rule in redundancy?

There is no formal '70/30 rule' in UK employment law. The common reference is to the £30,000 tax-free threshold for redundancy payments. Some people confuse this with HMRC rules about splitting payments. The key rule is simple: the first £30,000 of genuine redundancy pay is tax-free. Everything above that is taxed at your normal income tax rate.

Do I get redundancy pay if I have worked less than 2 years?

No — you must have at least 2 years of continuous employment with the same employer to qualify for statutory redundancy pay. If you have worked for less than 2 years you have no legal entitlement to statutory redundancy. However, some employers choose to offer a discretionary payment — check your employment contract or staff handbook.

Will statutory redundancy pay increase in April 2026?

Yes — from 6 April 2026, the weekly pay cap for statutory redundancy calculations increased from £719 to £751. This means the maximum statutory redundancy payment rises from £21,570 to £22,530 (20 years × 1.5 × £751). This change applies to redundancies effective on or after 6 April 2026.

How much tax will I pay on a £60,000 redundancy?

On a £60,000 redundancy payment: the first £30,000 is completely tax-free. The remaining £30,000 is taxed as income at your marginal rate — 20% if you're a basic rate taxpayer (tax: £6,000), or 40% if higher rate (tax: £12,000). You also do not pay National Insurance on any part of a genuine redundancy payment, even above £30,000.

Related Articles

Disclaimer: Always verify with GOV.UK, HMRC, Acas, and NHS. Sources: gov.uk, acas.org.uk, theemploymentlawsolicitors.co.uk, moneysavingexpert.com, nhsbsa.nhs.uk, nhs.uk, raisin.com, puremagazine.co.uk. April 2026.

Redundancy Pay UK 2026: Calculator, Tax Rules & What You're Entitled To

Redundancy Pay Formula UK 2026

Redundancy Pay Calculator: Worked Examples 2026

Statutory Redundancy Pay Table 2026 — Years of Service × Age Multiplier

Is Redundancy Pay Taxable? The £30,000 Rule

Tax on Large Redundancy Payments: Real Examples

Am I Eligible for Statutory Redundancy Pay?

Statutory vs Enhanced Redundancy: What's the Difference?

Frequently Asked Questions

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