Pay Calculator UK is a free, easy-to-use tool that helps you estimate your redundancy pay entitlement in seconds. If you’re facing redundancy, our calculator provides a quick redundancy payment estimator based on the UK’s statutory formula – giving you clarity on what you could receive. Using this tool can help you plan your finances, verify your employer’s calculations, and understand whether you’re getting a fair deal. It’s completely online and confidential, so you can calculate your redundancy entitlement with peace of mind without sharing personal data.
What is the Redundancy Calculator and Why Use It?
Our redundancy calculator is designed for UK employees to easily calculate redundancy entitlement. Redundancy pay can be confusing, involving your length of service, age, and salary. This calculator simplifies the process by doing the math for you. Benefits of using our free redundancy calculator include:
- Quick and Accurate Estimates: Instantly find out your statutory redundancy pay based on the latest UK government rules, without manual calculations. This ensures you know the minimum statutory redundancy pay you should receive.
- Understand Statutory vs Enhanced Pay: The tool can highlight the difference between statutory redundancy pay (the legal minimum) and any enhanced redundancy pay you might be offered by your employer. This helps you see if your employer is providing more than the minimum.
- Plan Your Finances: Knowing your redundancy payment allows you to budget for the future. You can adjust the inputs (years of service, weekly pay, etc.) in our redundancy payment estimator to see how different scenarios affect your payout.
- Confidential & Easy to Use: The calculator is free and requires no personal identifying information. Your inputs aren’t stored or shared, so you can confidently use it knowing your privacy is protected. The interface is straightforward – enter your age, years of service, and weekly pay, and get an instant result.
By using our tool, you’ll be empowered with knowledge about your redundancy rights and entitlements. This is often the first step toward negotiating a better package or simply having informed discussions with your employer.
How to Calculate Redundancy Pay in the UK (Statutory Formula)
Statutory redundancy pay in the UK is calculated using a formula based on your age, length of continuous service (up to 20 years), and weekly pay (capped at a legal maximum per week). The formula works as follows:
- Age under 22: You are entitled to half a week’s pay for each full year of employment when you were under 22.
- Age 22 to 40: You are entitled to one week’s pay for each full year of employment between the ages of 22 and 40 (and 5 week’s pay for any years before age 22 in that employment).
- Age 41 and above: You are entitled to 5 weeks’ pay for each full year of employment from age 41 onwards. (For years worked between 22 and 40 you still get 1 week per year, and for years under 22, 0.5 weeks per year.)
Your “weekly pay” is normally calculated as your average gross weekly wage before tax at the time of your redundancy notice (for hourly workers with variable pay, an average over 12 weeks is used). The government sets a cap on the weekly pay that can be used in the statutory calculation – even if you earn more, it will be counted only up to that limit.
For example, as of 2025, the maximum weekly amount for statutory redundancy pay is £719. Additionally, a maximum of 20 years of work can be counted toward statutory pay, even if you’ve worked longer. This means the absolute maximum statutory redundancy payout is capped (currently £21,570 in total for someone with 20 or more years of service and aged 41+).
Using the calculator: Our redundancy calculator applies this statutory formula for you. By inputting your age, years of service, and weekly pay, you’ll get an instant figure for your statutory redundancy entitlement. This helps confirm whether your employer’s offer meets the legal minimum. If the result is higher than what you’ve been offered, you may need to raise this with your employer or seek advice.
Statutory Redundancy Pay vs Enhanced Redundancy Pay
When it comes to redundancy payouts, there are two main types: statutory redundancy pay and enhanced redundancy pay.
- Statutory Redundancy Pay: This is the minimum redundancy payment required by law for eligible employees. If you’ve worked for your employer for at least two years and are being made redundant, you legally must receive this minimum amount. Statutory pay is calculated as described above, and employers cannot pay you less than this if you qualify. It’s essentially your basic entitlement under UK employment law.
- Enhanced (Contractual) Redundancy Pay: Anything above the statutory minimum is considered enhanced redundancy pay (also known as contractual redundancy pay). Employers are not obliged to pay more than the statutory amount, but some choose to offer a higher redundancy package. This could be due to company policy, collective agreements, or to encourage staff to accept the terms without dispute. Enhanced pay might mean a bigger lump sum (for example, using a more generous formula or not imposing the weekly pay cap), or even offering redundancy pay to those with less than 2 years’ service (who wouldn’t normally qualify for statutory pay).
Why would an employer offer enhanced pay? Often, it’s to reward long service or to maintain goodwill – or if they are asking you to sign a settlement agreement as part of redundancy. In a settlement agreement (a legally binding agreement where you waive your right to bring certain claims), the redundancy payment is usually higher than statutory as an incentive for you to sign. If you’re offered an enhanced package or a settlement agreement, it’s a sign that redundancy payments are negotiable. In fact, redundancy payments can often be negotiated higher, especially if the employer wants to avoid legal disputes or tribunal claims. Our calculator will still show your statutory baseline, but knowing that figure gives you a starting point to negotiate from – you’ll know how much extra is being offered on top of the legal minimum.
Remember: Statutory pay is a right, but enhanced pay is a privilege (or a negotiated benefit). Always check your contract or staff handbook – some employers have a policy to pay, say, “two weeks’ pay for every year of service” or a flat severance amount. Those would be forms of enhanced redundancy pay. If no policy exists, you can still try to negotiate, particularly if you feel the redundancy process was handled unfairly or if you have leverage (for example, potential claims for unfair dismissal). It’s wise to get legal advice in those situations (more on that below).
Is the Redundancy Calculator Accurate and Up-to-Date?
Absolutely. Our redundancy calculator is kept up-to-date with the latest UK statutory rates and rules. Employment law changes over time (for instance, the government typically updates the weekly pay cap annually), and we ensure the tool reflects current figures. The calculations it performs are based on the official statutory formula as outlined by GOV.UK and Acas, so you can trust the results for statutory entitlement.
That said, the tool provides an estimate, and your actual entitlement could differ if there are unique factors in your employment (for example, if you had a period of unpaid leave, or your employer already paid you in lieu of notice which can affect the “relevant date” for calculating service). But for most straightforward cases, the calculator’s result will mirror what the law says you should get.
We also emphasize confidentiality and accuracy: the tool does not store your data, and no one else (including your employer) can see the information you enter. You can use it anonymously and as often as you like. The goal is to give you a reliable snapshot of your redundancy pay so that you’re not left guessing or relying solely on your employer’s figures.
If you have any doubts about the calculation or if something seems off – for instance, if you think your employer hasn’t accounted for a certain year of service – the calculator’s output can be a prompt to ask for clarification or to seek advice.
Need Help? Get Personal Legal Advice on Your Redundancy
Facing redundancy can be stressful, but you don’t have to go through it alone. Our team at Settlement Agreement Lawyers are experts in UK redundancy rights and settlement agreements. We can review your situation – including any settlement agreement offer or enhanced redundancy package – and ensure you’re getting everything you’re entitled to (and more).
Book legal advice today for a free, no-obligation consultation with one of our experienced employment solicitors. We’ll listen to your circumstances and provide clear, supportive guidance on your options. If you’ve been offered a settlement agreement, we’ll explain the terms and check that the redundancy pay on offer is fair. Often, we can help negotiate a better redundancy pay deal for you, especially if the initial offer is below what we calculate as reasonable. Remember, if your employer is asking you to sign away your rights, it’s common for them to sweeten the deal – we’ll help make sure that deal is truly in your best interest.
Contact us now to arrange a chat with a specialist redundancy solicitor. We’re here to answer your questions about redundancy pay, notice periods, or any concerns about how your redundancy was handled. In many cases, the cost of a legal consultation is covered by your employer as part of the settlement agreement process – we can advise you on that as well. Don’t hesitate to reach out – getting informed legal advice can make all the difference in turning a difficult redundancy experience into a confident step forward.
Redundancy Calculator FAQs
How do I calculate statutory redundancy pay?
Statutory redundancy pay is calculated based on your age, length of service, and weekly pay. For each full year you’ve worked for your employer, you get a portion of a week’s pay according to your age in that year: half a week’s pay per year under age 22, one week’s pay per year for ages 22–40, and 1.5 weeks’ pay per year for ages 41 and above. Only the last 20 years of service count, and weekly pay is capped at a maximum amount (set by the government) for the calculation. To calculate manually, you’d apply these rules year by year, then sum up the weeks of pay and multiply by your weekly pay (subject to the cap). Our online redundancy pay calculator does this automatically – just input your details and it will output your statutory redundancy entitlement.
Who qualifies for redundancy pay?
Not everyone is entitled to statutory redundancy pay. In the UK, you qualify for statutory redundancy pay if you are an employee who has worked continuously for your employer for at least 2 years and you’re being made redundant. This covers most full-time and part-time employees. You won’t qualify if you have less than two years’ service or if you’re not technically an “employee” (for example, contractors and freelancers don’t get redundancy pay). Also, if you turned down a suitable alternative job offered by your employer before your redundancy took effect, the law might consider you ineligible for statutory redundancy pay (because the redundancy could have been avoided). Always check your situation – even if statutory pay doesn’t apply (say, you worked 18 months so you miss the 2-year mark), your employer might offer a ex gratia payment or enhanced redundancy pay, but that would be at their discretion rather than a legal requirement.
Is redundancy pay taxable?
Statutory redundancy pay is tax-free up to £30,000 in the UK. This means that for the vast majority of people, their entire redundancy payment won’t be taxed, since statutory amounts are usually well below that threshold. If you receive an enhanced redundancy package or other termination payments, the rule is generally that the first £30,000 of any compensation for loss of employment (including redundancy) is exempt from income tax. However, other elements that often come with a redundancy final paycheck – like payment in lieu of notice (PILON) or accrued holiday pay – are taxable as normal income. For example, if your employer pays you 3 months’ wages in lieu of notice, that portion will be taxed via PAYE just like your salary. Only the genuine redundancy compensation (the amount meant to compensate for your job loss) benefits from the tax-free portion. If your total redundancy payment does exceed £30,000, any excess above £30k would be subject to tax. National Insurance is not charged on redundancy payments, even on amounts above £30k – it’s only income tax that could apply. It’s a good idea to get advice or consult HMRC if you’re receiving a very large redundancy payment to understand the tax implications.
What is enhanced redundancy pay?
Enhanced redundancy pay (sometimes called contractual redundancy pay) is any redundancy payment that exceeds the statutory minimum. While statutory redundancy pay is mandated by law, enhanced redundancy is extra money that your employer may voluntarily offer. This could be due to a company policy, an individual employment contract term, or a one-off decision to be generous or avoid conflict. For instance, an employer might have a policy like “2 weeks’ pay for every year of service” (instead of the 0.5–1.5 weeks per year under the statutory scheme). Or they might pay everyone a flat sum on redundancy, or include things like an extra ex-gratia payment as a goodwill gesture. Enhanced pay can also be offered to employees with less than 2 years’ service (who legally aren’t entitled to statutory pay). Essentially, it’s anything above what the law requires. Employers might use enhanced redundancy pay to encourage acceptance of a settlement agreement, to reward long-serving employees, or to uphold a reputation as a good employer. It’s important to note that if your contract or company handbook promises a certain enhanced redundancy formula, then that amount becomes contractual – you could legally insist on it. Always check your contract or consult with a lawyer if you believe you have a right to an enhanced payment beyond the statutory amount.
Can I negotiate redundancy pay?
Yes, redundancy pay is often negotiable. While the statutory minimum isn’t negotiable (that’s your legal baseline if eligible), you can negotiate for an enhanced redundancy package. Employers, especially larger companies, may be open to negotiation if, for example, you have been a valuable employee or if they fear you might bring an unfair dismissal or discrimination claim. In practice, these negotiations commonly happen in the context of a settlement agreement – your employer offers to pay more than the minimum in exchange for you agreeing not to pursue any legal claims. If you feel that the redundancy terms are not adequate, you can absolutely ask for more. It helps to have reasons: maybe the selection process felt unfair, or others got better packages, or simply that you have hardship and need a bit more support. Employers often prefer to avoid legal disputes, so if by offering a few extra weeks’ pay they can secure your agreement and peace of mind, they might do so. It’s wise to get advice from a solicitor or a union rep when negotiating, as they can gauge what a reasonable ask would be in your situation. They can also handle the negotiations more formally on your behalf. Keep in mind, if you do negotiate a higher amount through a settlement agreement, your employer will usually require you to take independent legal advice (which they often pay for) before signing – this is routine and ensures you fully understand the deal. In short, don’t be afraid to negotiate – the worst that can happen is your employer says no, but they will often at least consider it, especially for long-term employees.
What happens if I refuse redundancy?
“Refusing redundancy” can mean a couple of things, so it’s important to clarify the scenario. If your employer has genuinely made your role redundant and you refuse to accept it, you technically can’t prevent an involuntary redundancy – an employer can still terminate your employment if your job is redundant (following due process). However, you could refuse to sign a settlement agreement or refuse an offered enhanced package, in which case you might still be made redundant but just paid the statutory minimum (and you’d keep the right to potentially bring legal action for unfair dismissal if you believe it wasn’t a genuine redundancy). Another common situation is if your employer offers you a suitable alternative position within the company instead of redundancy – if you unreasonably refuse a suitable alternative job, you might lose your right to statutory redundancy pay. This is because the redundancy could have been avoided. “Suitable” generally means comparable terms, pay, location, status, etc., to your old job.
If you are refusing redundancy because you think it’s unfair (for example, you believe you were selected for redundancy on discriminatory grounds or without proper process), then you have the option to appeal internally or take your case to an employment tribunal for unfair dismissal. You would essentially be arguing that you shouldn’t have been made redundant in the first place. It’s advisable to get legal advice in that scenario – there are strict time limits (usually 3 months minus one day from your termination) to file a claim.
In summary, you can’t stop a redundancy from happening if it’s genuine, but you can refuse to accept certain terms (like not signing a settlement agreement if you’re not happy with it). Just be aware that if you decline a reasonable offer (like an alternative job or a fair settlement), you may end up with only the bare minimum statutory pay, or potentially no redundancy pay at all if the alternative job rule applies. Always weigh the consequences and seek advice if in doubt.
How soon will I get my redundancy pay?
In most cases, your redundancy pay should be paid at the time your employment ends or on your final paycheck date. Many employers will include the redundancy payment in your last wage payment or will pay it shortly after your last working day. Legally, your employer is expected to pay any redundancy sum promptly when your job terminates, unless you agree on a different date in writing. For example, some people negotiate to receive it after the new tax year for tax reasons (if it’s a large sum and they’re close to the £30k tax-free limit), but that’s by mutual agreement. If for some reason you do not get your redundancy pay on time, first ask your employer (in writing) and remind them of what you’re owed. Most employers will sort it out quickly if it was an oversight. If they still don’t pay, you can take action – ultimately, you could make a claim to an Employment Tribunal for unpaid redundancy pay (you have up to 6 months minus a day from your last day of employment to do this).
For peace of mind, it’s perfectly reasonable to ask during your redundancy consultation or in your redundancy confirmation letter “When can I expect to receive my redundancy payment?” Employers know that people rely on that money, so they should give you a clear answer. Also note, if you have to work a notice period, your employer might choose to pay the redundancy money only after you’ve worked the notice (i.e., with your final salary). Or, if they are giving you payment in lieu of notice, they might pay the notice money and redundancy money together. In any case, it shouldn’t be an excessively long wait. If your employer becomes insolvent (goes bust) and can’t pay, there is a government scheme (the Redundancy Payments Service) that can step in to ensure you get at least the statutory amount – but that’s a worst-case scenario. Normally, you’ll have your redundancy pay in hand as you exit the company, helping support you while you transition to what’s next.