United Kingdom Tax year 2026/27
Rules checked against GOV.UK · updated 18 September 2026MethodologyReport a mistake

Redundancy pay calculator 2026/27

Work out the statutory redundancy payment your age and length of service earn, and see exactly which years count and where the legal caps bite.

Before tax. Include overtime only where your contract requires you to work it
Your weekly pay is
Enhanced redundancy, an ex gratia sum, or pay in lieu of notice. Not untaken holiday, which is ordinary pay
Before tax, from 6 April up to the day you leave. The tax on a termination depends on what the year has already used of your allowance and bands
Where do you live?
Your notice was
Used only where notice was partly not worked
Basic pay only: no overtime, bonus, commission or benefits
Statutory redundancy pay
£8,680.00
for 12 years of service at 45, worked out as 14.0 weeks of pay.
Weeks of pay14.0
A week’s pay used£620.00
Years counted12
A week’s pay is capped at £751. Your weekly pay of £620.00 is below the cap, so the payment uses your actual pay. Only the most recent 20 years of service count, which is why the statutory payment can never exceed £22,530.
What is taxed
£8,680.00
of the £8,680.00 package reaches you. None of it is taxed: the whole of it is inside the £30,000 exemption.
Paid without tax£8,680.00
Taxable£0.00
Income tax£0.00
Employer’s NI£0.00
The first £30,000 of a termination payment is exempt, and your statutory redundancy pay uses part of it. The whole £8,680.00 is held against the £30,000. It is inside the exemption, so none of it is taxed.
Your notice was worked, or paid as ordinary earnings, so there is no post-employment notice pay. Where notice is not worked, the part of a payment that stands in for it is taxed as earnings in full and gets none of the £30,000 exemption.
What this assumes. The termination payments are received in one tax year, by an employee who is not a director, under a cumulative tax code, and are not pensionable. The post-employment notice pay is paid with one period of ordinary pay, so employee National Insurance on it is charged against that period's limits and is never reconciled over the year. Section 402D(11) is not applied. A payment made after a P45 has been issued is taxed 0T on a month 1 basis, which changes what is deducted at the time but not what is due for the year; this calculation gives what is due. Northern Ireland has its own redundancy scheme. Section 402D(11) treats post-employment notice pay as the amount it would have been but for any arrangements whose purpose is to reduce it. That is a test of purpose, not of arithmetic, so this calculation does not apply it: the figures below are worked from the pay and notice you entered. Untaken holiday is ordinary pay and is not part of the figures above. Every payment here is treated as money: where part of a package is not cash — a company car kept on, or an asset transferred — the exemption is set against the cash first and only any balance at the end of the year reaches the rest, so a non-cash element is not in these figures and would be measured after them.
How it adds up

Your 14.0 weeks, year by year

Years of serviceEach year earnsYears countedWeeks of pay
Each year you were under 220.5 weeks00.0
Each year you were 22 to 401.0 weeks88.0
Each year you were 41 or over1.5 weeks46.0

Age is the age you were during each year of service, counting back from the day the job ends. Service beyond 20 years does not add to the payment.

How the tax works

The tax on a termination payment

A redundancy package is rarely one payment, and the parts are taxed differently. Statutory redundancy pay is itself tax-free, but it counts against the first £30,000 before anything else is measured against it, so an enhanced or ex gratia payment on top of a large statutory one has less of the exemption left than you might expect. Pay in lieu of notice is different again: where notice is not worked, the part of a payment that stands in for it is taxed as ordinary earnings and gets none of the exemption at all.

Untaken holiday is ordinary pay, not part of a termination payment, so it is not in the figures above. Nothing above assumes anything about your notice that you have not told it.

Rules v2026.18 · checked against GOV.UK on 18 September 2026Two independent checks on every rate · 393 of 418 hand-verified cases, all passing, beside 43,041 generated · How we calculate · Changelog
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Questions

Common questions

How is statutory redundancy pay worked out?

By your age, your length of service and a week’s pay. Each full year you were 41 or over earns 1.5 weeks’ pay, each year from 22 to 40 earns 1.0, and each year under 22 earns 0.5. Only the most recent 20 years count, and a week’s pay is capped at £751 however much you earn, so the payment cannot exceed £22,530.

Is there a minimum age for redundancy pay?

No. The Employment Rights Act 1996 set a lower age limit once and it was repealed with effect from 1 October 2006, so age decides only which band each of your years falls into and never whether you qualify at all. The one length condition is 2 years of continuous employment, and a year worked before you were 22 earns 0.5 weeks’ pay like any other year in that band. If you are young enough that the figure above looks too small to be right, that is the half-week band doing its work rather than a mistake.

Is redundancy pay taxed?

A statutory redundancy payment is itself free of income tax and National Insurance, and the first £30,000 of a termination payment is exempt — but the statutory payment counts against that £30,000 before anything else is measured against it, so a large statutory payment leaves less of the exemption for an enhanced or ex gratia sum. Anything above the exemption is taxed as pay at your own rates, and your employer pays Class 1A National Insurance on it while you pay none.

What about pay in lieu of notice?

Where your notice is worked, or paid as ordinary earnings, there is no post-employment notice pay. Where it is not worked, the part of the payment that stands in for it is treated as earnings in full and gets none of the £30,000 exemption — it is taxed and pays National Insurance like normal pay. The calculator asks which of those applies rather than assuming.

What else should I expect to be paid?

Untaken holiday is ordinary pay rather than part of a termination payment, so it is taxed as pay in the normal way and is not included in the figures above. An enhanced redundancy scheme in your contract is paid on its own terms; enter it as another payment on leaving and the calculator will measure it against the exemption with the statutory payment.

SourcesThe Employment Rights (Increase of Limits) Order 2026 — legislation.gov.ukRedundancy pay — GOV.UKEmployment Rights Act 1996, section 162 — legislation.gov.ukIncome Tax (Earnings and Pensions) Act 2003, section 403 — the exemption for a termination paymentIncome Tax (Earnings and Pensions) Act 2003, section 402B — post-employment notice pay as earningsIncome Tax (Earnings and Pensions) Act 2003, section 402C — the termination awards it is charged againstIncome Tax (Earnings and Pensions) Act 2003, section 402D — the notice pay formulaEIM13874 — a redundancy payment is added before the threshold (HMRC)EIM13886 — how to calculate P in the notice pay formula (HMRC)Social Security Contributions and Benefits Act 1992, section 10 — employer Class 1ATax on termination payments — GOV.UK