UK statutory redundancy pay explained
By Dexaloop · Updated 27 October 2026 · Checked against the sources listed below
Statutory redundancy pay in the UK is a set number of weeks' pay for each full year you have worked for your employer. You get half a week's pay for each year you were under 22, one week's pay for each year aged 22 to 40, and one and a half weeks' pay for each year aged 41 or over. Only your last 20 years count, and a week's pay is capped at £751 in England, Scotland and Wales, or £783 in Northern Ireland, for redundancies on or after 6 April 2026. You normally need 2 years' service to qualify. This guide is general information based on GOV.UK, nidirect and the Employment Rights Act 1996, checked on 27 October 2026.
Who qualifies
GOV.UK says you are normally entitled to statutory redundancy pay if you are an employee and you have worked for your current employer for 2 years or more. The employer guidance puts it as needing "at least 2 years continuous service." Both parts matter: the right is described for employees, and the 2 years are counted with your current employer. nidirect sets the same test for Northern Ireland: at least two years of continuous employment with your employer.
The three age bands
The rule comes from section 162 of the Employment Rights Act 1996. It counts backwards from the date your job ends and gives each full year of service a weight based on your age during that year.
| Your age during the year of service | Weeks' pay for that year |
|---|---|
| Under 22 | 0.5 |
| 22 to 40 | 1 |
| 41 and over | 1.5 |
Because the count runs backwards, your most recent years are the ones that get counted first. That matters for long service, as the next section shows.
The 20-year limit
Section 162(3) begins: "Where twenty years of employment have been reckoned under subsection (1)." Earlier years are then left out. So someone with 28 years' service is paid for their latest 20 years only. As those later years are often the ones at age 41 and over, a long-serving older worker usually reaches the top rate of 1.5 weeks for most or all of them.
The most weeks anyone can get is 20 × 1.5 = 30 weeks.
A week's pay and the cap
A week's pay is based on what you earn. GOV.UK says it is your average weekly pay over the 12 weeks before the day you got your redundancy notice. Whatever the real figure, it is capped:
| Where you work | Weekly pay cap from 6 April 2026 | Maximum statutory payment |
|---|---|---|
| England, Scotland and Wales | £751 | £22,530 |
| Northern Ireland | £783 | £23,490 |
The Northern Ireland figure was raised from £749 to £783 by the Department for the Economy, taking effect from 6 April 2026. GOV.UK notes that redundancies before 6 April 2026 use lower amounts, so the date of your redundancy decides which figure applies.
Worked example 1: age 45, 12 years, high earner
Alan is 45 when he is made redundant in Manchester. He has 12 full years' service and earns £820 a week.
- Counting back, 4 of his years were spent at age 41 or over (ages 41, 42, 43 and 44). 4 × 1.5 = 6 weeks.
- The other 8 years were all between 22 and 40. 8 × 1 = 8 weeks.
- Total: 6 + 8 = 14 weeks.
- His £820 is above the cap, so £751 is used.
- 14 × £751 = £10,514.
If Alan had the same job in Belfast, the cap would be £783, and the payment would be 14 × £783 = £10,962.
Worked example 2: age 25, 5 years
Chloe is 25 and has worked for the same employer since she was 20. She earns £500 a week, which is under the cap.
| Years counted back | Her age that year | Weeks each | Weeks |
|---|---|---|---|
| 3 most recent | 24, 23, 22 | 1 | 3 |
| 2 earliest | 21, 20 | 0.5 | 1 |
| Total | 4 |
4 × £500 = £2,000.
Worked example 3: long service and the 20-year limit
Margaret is 60 and has worked for the same firm for 28 years. She earns £600 a week, under the cap.
- Only 20 years count. Counting back from her last day, those are the years she spent aged 59 down to 40.
- The years at ages 41 to 59 are 19 years at 1.5 weeks: 28.5 weeks.
- The year at age 40 is 1 year at 1 week: 1 week.
- Total: 29.5 weeks. Her 8 earliest years, from age 32 to 39, are not counted at all.
- 29.5 × £600 = £17,700.
She is half a week short of the 30-week maximum only because one of her latest 20 years fell at age 40.
What to have ready before you work it out
- Your start date and the date your employment ends, to count full years.
- Your date of birth, to place each year in the right age band.
- Your payslips for the 12 weeks before your redundancy notice, to find your weekly pay.
- Whether you work in Great Britain or Northern Ireland, which sets the cap.
Tax
GOV.UK states: "Statutory redundancy pay under £30,000 is not taxable." Since the statutory maximum is below that, the statutory amount alone will not be taxed. Other money paid when you leave, such as holiday pay, is treated separately, so read the GOV.UK tax page for your full final payment.
Common mistakes
- Counting part years. Only full years count. 9 years and 10 months is 9 years.
- Counting forwards from the start date. The law counts back from the end, so the 20-year limit drops your earliest years, not your latest.
- Using pay above the cap. £751 (or £783 in Northern Ireland) is the most a week can be worth, however much you earn.
- Using today's age for every year. Each year is weighted by your age during that year, not your age now.
- Using an old cap. Check which year's figure applies to your redundancy date.
To run your own dates, age and weekly pay through the rules, use the calculator below.
Work out your redundancy pay: tools.dexaloop.com/redundancy-pay-calculator/. Free, no sign-up, and it runs on your device.
Questions
What is the maximum statutory redundancy pay in 2026?
For redundancies on or after 6 April 2026 it is £22,530 in England, Scotland and Wales: 20 years at one and a half weeks, so 30 weeks, at the £751 cap. In Northern Ireland the cap is £783, which gives £23,490.
Do I get redundancy pay with less than 2 years' service?
Not statutory redundancy pay. GOV.UK says you are normally entitled only if you are an employee who has worked for your current employer for 2 years or more.
Is redundancy pay taxed?
GOV.UK says statutory redundancy pay under £30,000 is not taxable. Other parts of a final payment, such as holiday pay, are treated differently.
What weekly pay is used if my earnings change from week to week?
GOV.UK uses your average weekly pay over the 12 weeks before the day you got your redundancy notice. The figure is then capped at £751 (£783 in Northern Ireland).
Do part years of service count?
No. Only full years of service count. Someone with 4 years and 11 months is paid for 4 years.
Sources
- GOV.UK: Redundancy, your rights: redundancy pay
- GOV.UK: Making staff redundant: redundancy pay (employers)
- GOV.UK: Redundancy, your rights: tax and National Insurance
- nidirect: Redundancy pay (Northern Ireland)
- Department for the Economy (NI): Minister announces increase in limits for unfair dismissal and redundancy payments
- legislation.gov.uk: Employment Rights Act 1996, section 162
This guide is general information, not legal, tax or financial advice. Rules change; check the official source for your own case. Found a mistake? Email support@dexaloop.com.