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Redundancy Pay Calculator

Estimate your statutory legal floor, notice pay, and ex-gratia enhanced severance for United Kingdom.

1. Your Package Parameters

£

Weekly pay is capped at GBP751 (2026 UK statutory cap).

£

Enter the total offered value (including any notice pay) to view a breakdown.

2. Package Breakdown

Total Redundancy Payout
£10,000

Legally Compliant

Your redundancy package meets or exceeds the statutory legal floor for United Kingdom.

Package Composition
Statutory Floor (£1,502)
Notice Pay (£5,000)
Enhanced Pay (£5,000)
ComponentAmount
Statutory Minimum£1,502
Notice Pay (Calculated)£5,000
Enhanced Severance (Ex-Gratia)£5,000
Total Severance Package£10,000
Audit Package Details

How UK Statutory Redundancy Pay is Calculated

If you have been employed continuously for 2 years or more in the UK, your employer is legally required to pay statutory redundancy pay under the **Employment Rights Act 1996** if your role is made redundant.

0.5 WeekUnder Age 22

For each full year of service worked while under 22 years old.

1.0 WeekAges 22 to 40

For each full year of service worked between ages 22 and 40.

1.5 WeeksAge 41 & Older

For each full year of service worked while aged 41 or older.

UK Statutory Caps & Rules (2026/27)

  • ✓Weekly Pay Cap: Weekly salary is capped at £751 per week (applicable for redundancies from 6 April 2026 onwards).
  • ✓Tenure Cap: Service is capped at a maximum of 20 years.
  • ✓Maximum Statutory Payout: The absolute maximum statutory redundancy payout is £22,530.

Redundancy Tax Free Rules

Under UK HMRC guidelines, statutory redundancy pay and enhanced severance (ex-gratia) payments are tax-free up to £30,000.

Note that payment in lieu of notice (PILON), holiday pay, or unpaid bonus components remain subject to normal Income Tax and National Insurance deductions.

Calculator FAQ

Quick answers to key questions about statutory and enhanced severance pay.

Statutory redundancy pay is the legal minimum payment your employer must provide. This varies by market. For example, in the UK under the Employment Rights Act 1996, it is based on age and complete years of service, with weekly pay capped at £751. Other markets like Ireland (under the Redundancy Payments Act 1967) or Germany (under the Civil Code BGB) have their own specific formulas, while countries like the US have no federal statutory minimum.
Notice pay is the compensation for your notice period (working or in lieu of notice). Enhanced severance (or ex-gratia) is the additional payment offered above your notice pay and legal statutory minimums, often in exchange for signing a release of claims agreement.
In the UK under HMRC guidelines, statutory redundancy and ex-gratia payments are tax-free up to £30,000. Other jurisdictions have different taxation rules. For instance, Germany offers tax relief via the Fünftelregelung.

Is your employer offering enhanced severance?

Statutory redundancy is just the legal floor. Most tech, finance, and enterprise companies offer 2x to 4x statutory pay as ex-gratia enhanced severance. Audit your package against real market benchmarks.

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