Statutory redundancy pay is calculated on your age, length of service, and weekly pay. The weekly pay used in the calculation is capped at £751 per week (from 6 April 2026). The maximum statutory award is £22,530. You need at least two years of continuous employment to qualify. Statutory redundancy pay is always paid tax-free. Where your total termination package also includes other payments, such as an enhanced redundancy sum or compensation, income tax applies to any amount above the £30,000 termination-payment threshold (ITEPA 2003, s.403). These are the minimum legal entitlements; your contract or employer may provide more. Updated June 2026.
Source: Employment Rights Act 1996, ss.155 and 162 (as amended); Employment Rights (Increase of Limits) Order 2026 (SI 2026/310); acas.org.uk/your-rights-during-redundancy/redundancy-pay.
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The Employment Rights Act 2025 (Royal Assent 18 December 2025) made one direct change to redundancy law from 6 April 2026: the maximum protective award for failure to consult on collective redundancy was doubled from 90 days to 180 days' gross pay per affected employee. The statutory redundancy pay formula itself is unchanged by ERA 2025. The weekly pay cap of £751 from 6 April 2026 reflects the annual uprating under the Employment Rights (Increase of Limits) Order 2026 — a separate mechanism that operates independently of ERA 2025.
How much statutory redundancy pay am I entitled to?+
Statutory redundancy pay is calculated using your age, complete years of service (up to 20), and gross weekly pay capped at £751 from 6 April 2026. You receive 0.5 weeks' pay per year under age 22, 1 week's pay per year aged 22–40, and 1.5 weeks' pay per year aged 41 or over. The maximum award is £22,530. Source: Employment Rights Act 1996, s.162; gov.uk/redundancy-your-rights/redundancy-pay.
Do I qualify for redundancy pay?+
You qualify if you have at least two complete years of continuous employment with the same employer when your employment ends. Service before your 18th birthday does not count. Part-time workers qualify on the same basis as full-time workers. Source: Employment Rights Act 1996, s.155.
Is statutory redundancy pay taxable?+
The first £30,000 of your total termination package — combining statutory redundancy pay and any enhanced redundancy sum — is free of income tax and National Insurance under ITEPA 2003, s.403. Amounts above £30,000 are subject to income tax. Important: payment in lieu of notice (PILON) is always subject to income tax and National Insurance regardless of whether it falls within the £30,000 threshold. PILON does not qualify for the tax-free treatment, even if your total termination package is under £30,000. Source: Income Tax (Earnings and Pensions) Act 2003, s.402D (PENP rules, in force from 6 April 2018); acas.org.uk/your-rights-during-redundancy.
What is the weekly pay cap for 2026?+
The statutory weekly pay cap is £751 per week from 6 April 2026. If your actual weekly pay exceeds this, the redundancy calculation uses £751. The cap is uprated annually, usually from 6 April. Source: Employment Rights (Increase of Limits) Order 2026; gov.uk/redundancy-your-rights/redundancy-pay.
What did the Employment Rights Act 2025 change about redundancy?+
ERA 2025 made one direct change to redundancy law from 6 April 2026: the maximum protective award for failure to consult on collective redundancy doubled from 90 to 180 days' gross pay per affected employee. The statutory redundancy pay formula and the weekly pay cap (set by the separate Increase of Limits Order 2026) are unchanged by ERA 2025. Source: Employment Rights Act 2025; acas.org.uk/your-rights-during-redundancy.
Am I entitled to holiday pay when I am made redundant?+
Yes. When your employment ends, you are entitled to a payment for all accrued but untaken statutory annual leave. This is calculated at your normal holiday pay rate — not just basic pay — and covers the full 5.6 weeks' entitlement pro-rated to your service in that leave year. The payment is separate from your statutory redundancy pay and must be made by your employer on or before your last day. Source: Working Time Regulations 1998, reg.14; acas.org.uk/your-rights-during-redundancy.