When you are facing redundancy, the sudden shift can feel overwhelming. However, understanding your statutory rights is the first and most critical step toward securing a fair exit package.
Here is a breakdown of what you need to know.
Statutory Redundancy Pay
In many jurisdictions, such as the UK, if you have been employed continuously for a certain period (usually 2 years), you are legally entitled to Statutory Redundancy Pay (SRP).
This is a baseline calculation based on:
- Your age
- Your years of continuous service
- Your weekly pay (up to a legal maximum limit)
How to Calculate
A common formula gives you:
- Half a week’s pay for each full year you were under 22
- One week’s pay for each full year you were 22 or older, but under 41
- One and half week’s pay for each full year you were 41 or older
Enhanced Severance (Ex-Gratia)
Many modern tech companies and large enterprises offer Enhanced Severance Packages (also known as Ex-Gratia payments). These go significantly above the statutory minimums to maintain good employer branding and to avoid complex employment tribunals.
If your employer offers a standard 1-month salary for every year worked, that is an enhanced package.
Before accepting an initial offer, always compare it against market benchmarks in your industry. That’s exactly why we built PinkSlip—so you can see what your peers received.
A good severance package is more than just a cash payment. Look for these valuable non-cash benefits, which can often be negotiated:
- Extended Healthcare: Continuation of private health, dental, or vision insurance for a set period.
- Outplacement Services: Access to professional career coaching, CV writing assistance, and interview preparation to help you land your next role faster.
- Equity (Stock): A clear statement on the treatment of your vested and unvested stock options or RSUs. Some generous packages may include accelerated vesting.
- Company Property: The option to keep company equipment, such as your laptop (after it has been wiped).
- Bonus Protection: A guarantee that you will receive a pro-rated bonus for the current performance period.
- Unused Leave Payout: A clear policy on the payout of accrued but unused vacation or personal days. In some regions, this is legally required.
Notice Pay
Do not confuse redundancy pay with Notice Pay or Payment in Lieu of Notice (PILON). If your contract states you have a 3-month notice period, your employer must either let you work for those 3 months while paying you normally, or pay you the equivalent value immediately (PILON).
Your notice pay is completely separate from your redundancy payout.
Severance by the Numbers: Insights from Our Database
To help you understand what a standard package looks like, we analyzed the user-reported redundancy packages in our database. Here is what the numbers show:
Enhanced (Ex-Gratia) Severance is the Norm
In our dataset of real-world professional redundancy reports:
- 96.3% of packages included enhanced (ex-gratia) severance that exceeded the statutory legal minimum.
- Only 1.9% of employees received zero severance (typically occurring during startup failures or severe financial distress).
- Only 1.9% received only the baseline statutory minimum without any enhancement.
What Next?
If you suspect your package is uncompetitive:
- Use our Audit My Offer tool to check if your package is fair.
- Do not sign a settlement agreement immediately.
- Consider speaking with an employment lawyer or union representative.