UK redundancy pay guide 2026-27
Being made redundant is stressful enough without trying to work out what you're owed. This guide explains, in plain English, how statutory redundancy pay works for redundancies on or after 6 April 2026, what else should be in your leaving package, how it's taxed and what to do if the money doesn't arrive. It follows the rules on GOV.UK and legislation.gov.uk and is general guidance only, not legal or financial advice. Your contract or your employer's redundancy scheme may give you more than the legal minimum.
Work out your redundancy pay in the calculator
The short version
- Who qualifies: employees with at least 2 years' continuous service.
- How much: half a week's pay per full year under 22, one week per year from 22 to 40, one and a half weeks per year at 41 or over, for up to 20 years.
- Weekly pay cap: £751 in England, Wales and Scotland, £783 in Northern Ireland, from 6 April 2026. The most you can get is £22,530 (£23,490 in Northern Ireland).
- On top: notice (or pay in lieu) and pay for holiday you haven't taken.
- Tax: the first £30,000 of redundancy pay is usually tax-free. Notice and holiday pay are taxed like wages.
- Deadline: claim within 6 months of your job ending.
- Employer insolvent? Apply to the Redundancy Payments Service.
Who qualifies for statutory redundancy pay
You'll normally get statutory redundancy pay if you're an employee and you've worked for your current employer for 2 years or more without a break. Only full years count, so 1 year and 11 months isn't enough.
You won't get it if:
- your employer offers to keep you on
- your employer offers you suitable alternative work and you turn it down without good reason
- you're dismissed for misconduct, because that isn't redundancy
- you're in an excluded group: crown servants, the armed forces and police, share fishermen, former registered dock workers, apprentices who aren't employees at the end of their training, or a domestic servant who is a member of the employer's immediate family
If you're offered another job with your employer, you have the right to a 4-week trial (longer if you need training and it's agreed in writing first). If you tell your employer during the trial that the job isn't suitable, you keep your right to redundancy pay. You can also claim redundancy pay if you've been laid off without pay, or on less than half a week's pay, for more than 4 weeks in a row or more than 6 weeks in a 13-week period.
How statutory redundancy pay is worked out
Three things decide the amount: your age, your full years of service and your weekly pay.
- Age bands: count back year by year from the date you're made redundant. Each full year when you were 41 or over earns 1.5 weeks' pay. Each full year when you were 22 to 40 earns 1 week. Each full year when you were under 22 earns half a week.
- 20-year limit: only your most recent 20 years count, however long you've been there.
- A week's pay: your average weekly pay before tax over the 12 weeks before the day you got your redundancy notice. If you were on furlough and paid less than usual, it's based on what you would normally have earned.
- The cap: a week's pay is capped, so if you earn more than the cap, the cap is used instead.
| Made redundant | Where you work | Weekly pay cap | Maximum payment |
|---|---|---|---|
| On or after 6 April 2026 | England, Wales and Scotland | £751 | £22,530 |
| On or after 6 April 2026 | Northern Ireland | £783 | £23,490 |
The maximum is 20 years × 1.5 weeks × the cap. Caps from the Employment Rights (Increase of Limits) Order 2026 (SI 2026/310) and the Northern Ireland Order 2026 (SR 2026/57). The calculator also has the lower 2025-26 caps for redundancies before 6 April 2026.
Worked examples
These use the same code as our redundancy pay calculator, for redundancies on or after 6 April 2026 in England, Wales or Scotland unless stated.
1. Aged 45 with 12 years' service
Jo is 45 when she's made redundant, has 12 full years with her employer and earns £600 a week before tax, which is under the £751 cap. Counting back from her redundancy date, her last 4 years were at age 41 or over (4 × 1.5 = 6 weeks) and the 8 years before that were at 22 to 40 (8 weeks). That's 14 weeks × £600 = £8,400, all of it tax-free.
2. Long service and high pay
Dev is 50, has 25 years' service and earns £1,000 a week. Only his last 20 years count: 9 years at 41 or over and 11 years at 22 to 40, so 24.5 weeks. His week's pay is capped at £751, so he gets 24.5 × £751 = £18,399.50. Working in Northern Ireland, where the cap is £783, it would be £19,183.50.
3. Started work at 18
Aisha is 24 and has 6 full years' service on £400 a week. Her last 2 years count at 1 week each and the 4 years before she turned 22 at half a week each: 4 weeks × £400 = £1,600.
Notice and notice pay
Redundancy pay is on top of your notice. The legal minimum notice your employer must give is:
| How long you've worked there | Minimum notice |
|---|---|
| 1 month to 2 years | 1 week |
| 2 to 12 years | 1 week for each full year |
| 12 years or more | 12 weeks |
Your contract can give you longer, but not less. You'll either work your notice and be paid as normal, or get pay in lieu of notice (PILON): the basic pay you'd have earned, plus any extras your contract includes. Notice pay is based on your average weekly pay over the 12 weeks before your notice starts.
If you've had 2 years' service by the end of your notice, you can take a reasonable amount of paid time off to look for work or arrange training. Your employer only has to pay up to 40% of one week's pay for it in total.
Holiday pay
When you leave, your employer must pay you for any statutory holiday you've built up but not taken. This is the only time you can be paid instead of taking statutory leave, and it applies even if you're dismissed for gross misconduct. You may also be able to use up your remaining leave during your notice period. Work out what you've built up with the holiday entitlement calculator or read the holiday entitlement guide.
Tax and the £30,000 tax-free amount
You don't usually pay tax on the first £30,000 of these added together:
- statutory redundancy pay
- enhanced redundancy or extra severance pay from your employer
- non-cash benefits, for example company property you keep after your job ends
Anything above £30,000 is taxed as income. You don't pay National Insurance on it; your employer pays 15% Class 1A National Insurance on the excess instead. For example, statutory pay of £18,399.50 plus £20,000 enhanced pay is £38,399.50, so £8,399.50 is taxed and the rest is tax-free.
These are taxed and have National Insurance taken like normal pay, whatever the total:
- notice pay, pay in lieu of notice and pay on gardening leave
- holiday pay
- unpaid wages and bonuses
- payments for agreeing to a restrictive covenant
Post-employment notice pay (PENP). If you don't work your notice and don't get separate notice pay, the part of your severance that matches the basic pay you'd have earned in your notice is taxed like wages. It never comes out of statutory redundancy pay. GOV.UK's example: £10,000 statutory pay, a £5,000 severance payment and 4 weeks' notice not worked at £500 a week, so £2,000 is taxed and £13,000 is tax-free.
Why so much tax? If the payment comes after you've been given your P45, your employer must use the 0T tax code, which assumes your Personal Allowance is used up. If you've paid too much, contact HMRC. Payments because an injury, illness or disability stops you doing your job, employer contributions to a registered pension scheme (up to your Annual Allowance) and legal costs for the settlement paid straight to your solicitor aren't taxed.
Scottish taxpayers. If you live in Scotland, the taxed parts are charged at Scottish Income Tax rates. It's where you live that matters, not where you work. The calculator asks where you live and estimates the tax either way.
Deadlines to claim
- Statutory redundancy pay: claim within 6 months of the date your job ends. In England, Wales and Scotland the claim is in time if, within those 6 months, the payment is agreed and paid, you've written to your employer claiming it, you've referred it to an employment tribunal, or you've made an unfair dismissal claim.
- Missed it? An employment tribunal can still award the payment if you act within the following 6 months and it thinks that's just and equitable, looking at why you were late.
- Employer insolvent: apply to the Redundancy Payments Service for redundancy pay, unpaid wages and holiday pay within 6 months of being dismissed.
- Northern Ireland: nidirect also says to claim unpaid redundancy pay within six months of your job ending.
If your employer won't pay or you disagree with the amount, talk to them first, then get free advice from Acas before the deadline.
If your employer can't pay: the Redundancy Payments Service
If your employer is insolvent (in administration, liquidation or similar), the government can pay some of what you're owed. The insolvency practitioner or official receiver should give you a fact sheet and a case reference (CN) number, which you need to apply. You can claim:
- statutory redundancy pay if you had 2 years' service, worked out the usual way
- unpaid wages, overtime, bonus and commission that's in your contract: up to 8 weeks
- holiday pay for leave taken or built up in the 12 months before the insolvency: up to 6 weeks
- statutory notice pay: one week for each year you worked there, up to 12 weeks
Each is capped at £751 a week (£719 if you were made redundant before 6 April 2026). Unpaid wages and holiday pay are taxed. Benefits you got, or could have claimed, are taken off statutory notice pay, so it's worth claiming any benefits you're eligible for. You apply for notice pay separately, with an LN reference number that's sent after your notice period would have ended. Payment usually takes up to 6 weeks. See your rights if your employer is insolvent on GOV.UK.
Scotland and Northern Ireland
Redundancy pay rules in Scotland are the same as in England and Wales, including the £751 cap. Only the Income Tax on the taxable parts can differ, if you live in Scotland. Northern Ireland has its own employment law with the same age bands and 20-year limit but a higher cap of £783 a week (maximum £23,490). Check redundancy pay on nidirect for Northern Ireland's rules.
Work out your own redundancy pay
Enter your age, years of service and pay to see your statutory redundancy pay year by year. Then add enhanced pay, notice and holiday to see what's tax-free, what's taxed and roughly what you'll take home.
Use the redundancy pay calculatorStarting a new job? The take-home pay calculator shows your new pay after tax. More tools are on the Tax & Pay page.
Make your redundancy money last
Between jobs it helps to know exactly where the money goes. The Household Bills & Budget Planner (£7, Excel and Google Sheets) lists every bill, however often it's paid, turns it into one monthly figure and shows what's left.
Get the bills & budget planner (£7)Prefer free? Try the bills monthly cost calculator.
Frequently asked questions
How much statutory redundancy pay will I get in 2026-27?
Half a week's pay for each full year of service while you were under 22, one week's pay for each full year from 22 to 40, and one and a half weeks' pay for each full year at 41 or older, counting back from your redundancy date. Only the last 20 years count. If you were made redundant on or after 6 April 2026, a week's pay is capped at £751 in England, Wales and Scotland and £783 in Northern Ireland, so the most you can get is £22,530, or £23,490 in Northern Ireland.
Do I need 2 years' service to get redundancy pay?
Yes. To get statutory redundancy pay you normally need to be an employee with at least 2 years' continuous service with your employer. With less than that you should still get notice if you've worked there for at least a month, plus pay for any holiday you're owed, and your contract or your employer's redundancy scheme may pay something anyway.
Is redundancy pay taxed?
The first £30,000 of statutory redundancy pay, enhanced redundancy or severance pay and non-cash benefits you keep, added together, is usually tax-free. Anything above £30,000 is taxed as income but has no employee National Insurance; your employer pays Class 1A National Insurance on it instead. Notice pay, pay in lieu of notice, holiday pay, unpaid wages and bonuses are taxed and have National Insurance taken like normal pay.
Does Scottish Income Tax apply to my redundancy payment?
Only to the taxable parts, and only if you live in Scotland. Scottish Income Tax depends on where your main home is, not where your employer is, so someone who lives in Scotland and works in England pays Scottish rates on their notice pay, holiday pay and anything over £30,000. The £30,000 tax-free amount and National Insurance are the same everywhere in the UK.
How much notice do I get when I'm made redundant?
At least one week if you've worked for your employer for between 1 month and 2 years, one week for each full year if you've worked there between 2 and 12 years, and 12 weeks if you've been there 12 years or more. Your contract can give you more but not less. Your employer either pays you through your notice or pays you in lieu of notice.
Do I get paid for holiday I haven't taken?
Yes. When you leave, your employer must pay you for statutory holiday you've built up but not taken, even if you're dismissed for gross misconduct. It's taxed and has National Insurance taken like normal pay.
How long do I have to claim redundancy pay?
Claim within 6 months of the date your job ends. In England, Wales and Scotland that means agreeing and getting the payment, writing to your employer to claim it, or referring it to an employment tribunal within that time. If you miss it, a tribunal can still award the payment if you act in the next 6 months and it thinks that's just and equitable.
What if my employer can't pay my redundancy money?
If your employer is insolvent, you can apply to the government's Redundancy Payments Service for statutory redundancy pay, up to 8 weeks of unpaid wages, up to 6 weeks of holiday pay and statutory notice pay, each capped at £751 a week. You need the case reference (CN) number from the insolvency practitioner or official receiver, and you must apply for redundancy pay within 6 months of being dismissed.
Can I lose my redundancy pay?
Yes, if your employer offers to keep you on, or offers you a suitable alternative job and you turn it down without good reason. You're entitled to a 4-week trial in a new role, and turning it down during the trial doesn't affect your right to redundancy pay. Being dismissed for misconduct isn't redundancy, and some jobs, such as the armed forces, police and crown servants, are excluded.
Sources
All rules and figures on this page were checked on 19 October 2026:
Redundancy: your rights (GOV.UK)
Calculate your statutory redundancy pay (GOV.UK)
Termination payments and tax when you leave a job (GOV.UK)
Taking holiday before leaving a job (GOV.UK)
Your rights if your employer is insolvent (GOV.UK)
Scottish Income Tax (GOV.UK)
Employment Rights (Increase of Limits) Order 2026 (legislation.gov.uk)
Employment Rights (Increase of Limits) Order (Northern Ireland) 2026 (legislation.gov.uk)
Employment Rights Act 1996 s162, s164 and s86 (legislation.gov.uk)
Income Tax (Earnings and Pensions) Act 2003 s403 (legislation.gov.uk)
Redundancy pay (nidirect)
Checked 19 October 2026. This covers the statutory minimum only; your contract may give you more. It doesn't cover unfair dismissal, collective consultation awards or redundancy while on maternity or parental leave. General guidance only, not legal or financial advice.