If you have been made redundant, understanding your statutory redundancy rights is essential. In many cases, redundancy payments can be tax free up to £30,000, whether you receive statutory redundancy pay or a higher amount through contractual redundancy pay.

This page explains how much redundancy pay you may be entitled to, how it is calculated, and how notice pay and alternative work can affect your redundancy rights.

How Much Statutory Redundancy Pay Can You Get?

How Much Statutory Redundancy

If you have worked for your employer for at least two years and your employment ends due to redundancy, you are usually entitled to statutory redundancy. This is the statutory minimum amount an employer must pay unless other arrangements apply.

The amount of redundancy pay depends on your length of service, age, and weekly pay, and is calculated as:

• Under 22: half a week’s pay for each full year of service
• Aged 22 to 40: one week’s pay for each full year of service
• Over 41: one and a half weeks’ pay for each full year of service

A maximum number of 20 years service can be counted when you calculate redundancy pay.

Maximum Statutory Redundancy Pay 2025–26

If you were made redundant on or after 6 April 2025, the maximum weekly amount of pay used in calculations is £719. This means the maximum statutory redundancy pay for the 2025–26 tax year is £21,519.

These limits apply regardless of your normal pay, usual pay, or gross pay, unless your employer pays more through a contractual redundancy arrangement.

Contractual Redundancy Pay

Contractual Redundancy and Better Employer Terms

Some employers offer contractual redundancy pay, which may be higher than the statutory minimum. This could be set out in your employment contract or offered as part of a voluntary redundancy scheme.

Contractual redundancy pay can increase how much redundancy pay you receive, but tax rules still apply to redundancy payments above the tax free threshold.

Notice Pay and Notice Period

Notice Pay, Notice Period, and Contractual Notice

Redundancy pay is separate from notice pay. You are normally entitled to a statutory notice period based on your years service, unless your contractual notice period is longer.

If your employer ends your employment immediately, they may make a payment in lieu of notice. This payment is usually taxable and treated as normal pay.

Entitled to Redundancy and Alternative Work

Alternative Work and Suitable Employment

You may not be entitled to redundancy if your employer offers suitable alternative employment and you refuse it without a valid reason. Whether alternative work is suitable depends on pay, location, duties, and how closely it matches your normal work.

This applies to permanent roles, fixed term contracts, and situations involving temporary lay offs or continuous employment.

Other Redundancy Rights and Considerations

Claiming Statutory Redundancy Pay

If your employer does not pay, you can claim statutory redundancy pay through official channels. In some cases, disputes may lead to an employment tribunal, particularly where unfair dismissal or redundancy rights are challenged.

Certain groups such as armed forces, crown servants, domestic servants, and former registered dock workers may have different rules.

Summary

• You must usually be continuously employed for two years to qualify
• Redundancy pay is based on age, length of service, and weekly pay
• The maximum statutory redundancy payment for 2025–26 is £21,519
• Contractual redundancy pay may increase how much you receive
• Notice pay and holiday pay are separate from redundancy payments

Understanding your redundancy rights can help you plan your next steps, whether that is starting a new job, moving to a new employer, or reviewing your options after redundancy.

Source: www.gov.uk/redundancy-your-rights