UK Statutory Redundancy Pay 2026: The Complete Guide (with Examples)
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If you're made redundant in the UK and have at least two years' service, your employer must pay you statutory redundancy pay. This guide explains exactly how it's worked out in 2026 under the Employment Rights Act 1996, with examples.
The rule in one line
For every full year of service you earn a number of weeks' pay set by your age during that year: 1.5 weeks for years aged 41+, 1 week for years aged 22–40, and half a week for years under 22 — counting only your most recent 20 years, with weekly pay capped.
The three numbers that cap your payment
- 20-year cap: only your most recent 20 years of service count.
- Weekly-pay cap: £751 for redundancies on or after 6 April 2026 (£719 for 2025/26). If you earn more, the excess is ignored.
- Maximum payment: £22,530 in 2026/27 (30 weeks × £751).
Worked example
A 45-year-old with 8 full years of service earning £600 gross a week (under the cap):
- Working back from age 45, four of those years fall in the 41+ band and four in the 22–40 band → (4 × 1.5) + (4 × 1) = 10 weeks.
- 10 weeks × £600 = £6,000.
If instead they earned £900 a week, the pay is capped at £751: 10 × £751 = £7,510.
How the age bands actually work
The bands are assessed year by year, not by your age at dismissal. The GOV.UK method counts backwards from your current age, so a 42-year-old with 3 years' service gets 1.5 weeks for each of those three years, but a 24-year-old with 3 years' service gets years partly in the 22–40 band and partly in the under-22 band.
Tax
Statutory redundancy pay is tax-free, and the first £30,000 of any total redundancy package (statutory plus enhanced) is also tax-free.
Enhanced redundancy
Statutory is only the legal floor. Many employers offer enhanced redundancy — more weeks per year, or no weekly-pay cap. Always check your contract; this calculator shows the statutory minimum you cannot legally be paid below.
Frequently asked questions
How is UK statutory redundancy pay calculated?
For each full year of continuous service you get 1.5 weeks' pay for years you were 41 or over, 1 week's pay for years you were 22 to 40, and half a week's pay for years under 22. Only your most recent 20 years count, and weekly pay is capped at the statutory limit (£751 from 6 April 2026, £719 for 2025/26).
What is the maximum statutory redundancy payment?
The maximum is 30 weeks' pay at the capped weekly rate: £22,530 for redundancies on or after 6 April 2026 (20 years × 1.5 weeks × £751), and £21,570 for 2025/26 (× £719).
Do I qualify for statutory redundancy pay?
You must have at least two years of continuous service with the employer and be an employee (not self-employed or a genuine contractor). Some dismissals — such as being offered suitable alternative work you unreasonably refuse — can remove the entitlement.
Is redundancy pay based on gross or net pay?
Gross pay — your average weekly earnings before tax over the 12 weeks before you were given notice, capped at the statutory weekly limit. Statutory redundancy pay itself is tax-free up to £30,000.
Does my employer have to give more than statutory?
Statutory is the legal minimum. Many employers pay enhanced (contractual) redundancy that is more generous — check your contract or company policy. This calculator shows the statutory floor.