Redundancy Pay Calculator

You get a number of weeks’ pay based on your age in each complete year of service: half a week for years under 22, one week for years aged 22 to 40, and one and a half weeks for years at 41 or over. Service is capped at 20 years, and weekly pay is capped at £751 from 6 April 2026 (£783 in Northern Ireland). Example: 10 full years all aged 41+ on £40,000 a year gives 15 weeks × £751 = £11,265, all tax-free.

With the £751 weekly cap and the 20-year service cap, the maximum is 30 weeks × £751 = £22,530 (from 6 April 2026, England, Wales and Scotland). Anything your employer pays above the statutory minimum is enhanced redundancy — still tax-free within the overall £30,000 termination exemption.

The first £30,000 of a genuine termination award — statutory redundancy, enhanced redundancy and other genuine compensation for losing your job — is free of Income Tax and National Insurance. Any genuine termination award above the combined £30,000 exemption is subject to Income Tax; the employee does not pay National Insurance on that excess, although the employer normally pays Class 1A NI on it. Earnings like PILON, holiday pay, outstanding salary and bonuses are not part of the £30,000 and are taxed in full.

The part above £30,000 is added to the rest of your income for the tax year and taxed at your top rate of Income Tax. For example, if you had earned £25,000 before leaving, an £80,000 award leaves £50,000 taxable, which costs £14,946 in Income Tax, so you keep £65,054. You pay no National Insurance on it; your employer pays 15% Class 1A instead.

No, it isn’t an official tool. GOV.UK’s statutory redundancy calculator works out statutory redundancy pay only, from your age, weekly pay and years of service. This one follows HMRC’s rules to work out the tax on the whole package, including enhanced redundancy, notice pay, holiday pay and the £30,000 exemption.

No. Statutory redundancy pay is part of the tax-free termination award, so as long as your total termination award is under £30,000 it is paid in full with no Income Tax or National Insurance.

Notice pay is taxed as earnings — Income Tax and employee National Insurance — and does not count towards the £30,000 exemption, which only covers genuine compensation for loss of the job. Where the payment is not already taxable as contractual PILON, HMRC’s Post-Employment Notice Pay (PENP) rules identify the part of a severance or enhanced redundancy figure that relates to unworked notice and treat it as earnings. Use the PILON/PENP amount your employer or settlement agreement gives.

Not as the employee. The part of a termination award above £30,000 is subject to Income Tax but not employee National Insurance — your employer pays Class 1A National Insurance on it instead. Earnings such as PILON and holiday pay do attract employee NI.

If part of the payment is made after your P45 is issued, your employer often uses an emergency 0T tax code, which gives no personal allowance and can over-deduct tax up front. HMRC reconciles this after the tax year, so you may be due a refund or owe a little depending on your total income.