Statutory redundancy pay: the £751 cap and worked examples

Who gets statutory redundancy pay

You are normally entitled to statutory redundancy pay if two things are true:

• you are an employee, not only a worker or self-employed;
• you have worked for your employer continuously for 2 years or more.

You can lose the right in some cases set out on GOV.UK: for example, if you turn down a suitable alternative job without a good reason, if you are dismissed for misconduct, or if your employer offers to keep you on.

Your contract may also promise more than the legal minimum (often called “enhanced” redundancy pay). This guide covers only the statutory amount, which is the floor.

How much is it? The age bands

The law gives a number of weeks’ pay for each full year of service. The number depends on your age during that year ERA 1996, s.162(2).

Your age during that year of service	Weeks of pay for that year
Under 22	0.5
22 to 40	1
41 or older	1.5

Three points catch people out:

• Count backwards. You start from your leaving date and count full years back towards your start date s.162(1). Part-years do not count.
• 20 years at most. Only the most recent 20 full years count s.162(3). Older service is ignored.
• Each year has its own band. If you turned 41 during your service, the later years are worth 1.5 weeks and the earlier ones 1 week. A year counts at the higher rate only if you had reached that age for the whole of it.

The £751 cap and the £22,530 maximum

A week’s pay is capped. For redundancies on or after 6 April 2026, the cap is £751 a week. Before that date, it was £719 SI 2026/310, Sch..

If you earn more than £751 a week before tax, the calculation uses £751. If you earn less, it uses your actual weekly pay.

The highest possible amount is 20 years × 1.5 weeks × £751 = £22,530.

The cap is usually updated every April. This guide will be updated when the new figure is published.

What counts as a week’s pay

GOV.UK says your weekly pay is the average you earned per week over the 12 weeks before the day you got your redundancy notice. Acas adds that it is your pay before tax (gross).

If your employer did not let you work your statutory notice, for example because it paid you in lieu, the law can count your service up to the date that statutory notice would have ended s.145(5). That can add a full year, and with it the 2-year threshold or a higher amount. Acas gives the example of someone with 8 years and 11 months’ service and 8 weeks’ statutory notice paid in lieu, who must be paid for 9 full years.

This later date counts for your service and the amount, but not for the time limit to claim s.145(5). So count the 6 months below from your real leaving date. The pay in lieu of notice guide explains how notice pay itself is worked out.

Worked example: £9,012.00

Here is one case, step by step, with the same figures the calculator uses.

• Born 10 March 1981. Started work on 1 May 2016.
• Received notice on 1 April 2026, worked it, and left on 30 June 2026.
• Weekly pay: £800 before tax.

1. Full years of service from 1 May 2016 to 30 June 2026: 10.
2. Count backwards from 30 June 2026. The four most recent years were all at age 41 or over: 4 × 1.5 = 6 weeks. The six earlier years each began before his 41st birthday, when he was 35 to 40: 6 × 1 = 6 weeks.
3. Total: 12 weeks.
4. Cap the week: £800 is above the cap, so the calculation uses £751.
5. Statutory redundancy pay: 12 × £751 = £9,012.00.

The written claim deadline in this example is 29 December 2026 (see below).

Two more examples

Case	Years counted	Weeks	Week used	Amount
Born 1 May 2003, started 1 September 2022, left 30 September 2026, £400 a week	4	1 × 1 + 3 × 0.5 = 2.5	£400	£1,000.00
Born 1 January 1964, started 1 June 2001, left 30 October 2026, £1,000 a week	25 full years, only 20 counted, all at 41 or over	20 × 1.5 = 30	£751	£22,530.00 (the maximum)

In the second case, five years of service bring nothing more. That is the 20-year limit at work.

Your employer must show the calculation

When your employer pays statutory redundancy pay, it must give you a written statement showing how the amount was calculated. If it does not, you can ask for one in writing and give it at least one week to reply s.165.

Check the statement line by line: your start and leaving dates, the number of full years, the age band of each year, the weekly pay used and the cap.

When must you claim it? The 6-month rule

You lose the right to statutory redundancy pay unless, within 6 months of your leaving date, one of these has happened s.164(1):

• the payment has been agreed and paid;
• you have made a claim in writing to your employer;
• you have referred the question to an employment tribunal;
• you have made an unfair dismissal complaint to a tribunal.

An unfair dismissal award has its own basic award, worked out like redundancy pay: see unfair dismissal compensation.

The 6 months begin with your leaving date, so the last day is 6 months minus 1 day: add 6 calendar months, then take off 1 day. In the example above, a leaving date of 30 June 2026 gives 29 December 2026. A written claim should reach your employer by then, so send it early. The calculator suggests a sending date about ten days before the limit (here, 18 December 2026), moved back to the previous working day. Leaving dates at the end of a month need care: see employment tribunal time limits.

A tribunal may still allow a claim made in the following 6 months if it finds it “just and equitable” s.164(2). Do not count on it: that is for the tribunal to decide.

Is redundancy pay taxed?

GOV.UK says that statutory redundancy pay under £30,000 is not taxable. Other parts of a final payment, such as wages or holiday pay, follow their own rules: see is redundancy pay taxed?.

Northern Ireland has its own rules

This guide covers England, Wales and Scotland. Northern Ireland has its own legislation, a different weekly cap and its own tribunal and conciliation service. For Northern Ireland, see nidirect.

If your employer cannot pay

If your employer is insolvent, statutory redundancy pay can be claimed from the government’s Redundancy Payments Service. The application is made online, within 6 months of being dismissed, and you need a case reference number (CN) to start it. GOV.UK explains the steps, and the guide on what to do if your employer won’t pay your redundancy pay covers both cases: an employer that is insolvent and one that simply does not pay.

Next steps

1. Check, free. The redundancy pay calculator counts your years backwards, applies the bands and the cap, compares the result with what you have received, and gives the written claim deadline with a suggested sending date. You can ask for a free email reminder before that date.
2. Claim in writing. If the money is missing or short, you can prepare a redundancy pay claim letter yourself, with the calculation set out and a request for the written statement: £9, or £19 with a dated follow-up letter and reminders.
3. Next step. If nothing changes, the usual route is to contact Acas for early conciliation before any tribunal claim. A free Acas preparation sheet lists what Acas will ask, and the early conciliation guide explains the steps. The tribunal time limits guide explains the dates. Acas, Citizens Advice, a trade union or a solicitor can also help you.