How is my redundancy pay calculated?

Provided you have two years' continuous service with your employer and are an employee, you will be entitled to a statutory redundancy payment on being made redundant. This is calculated as follows:

  • half a week's pay for each year of employment up to the age of 22;
  • one week's pay for each year of employment between the ages of 22 and 40;
  • one and a half week's pay for each year of employment over the age of 41;
  • a maximum of 20 years' employment can be taken into account; and
  • there is a statutory maximum limit to a week's pay. This is set annually and is currently £479 per week.

If your employer has not been paying you the National Minimum Wage, your redundancy payment must be paid at the level of the National Minimum Wage for the weekly hours you worked. It is against the law not to pay you the National Minimum Wage.

A maximum of 20 years' service is taken into account and there is a limit to a week's pay for statutory redundancy purposes, which in 2016 was set at £479. This means that the maximum payment under the statutory scheme is currently £14,370 (i.e. 30 weeks at £479).

The GOV.UK website has a redundancy calculator for working out your entitlement.

This is the minimum redundancy pay that you are due. Your employer may operate a more generous scheme.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.