UK Redundancy Payment Calculator (2026)

Full years only count for statutory — 11 years and 9 months = 11 years counted.

Used for age-banded multiplier (0.5 / 1.0 / 1.5). The tool applies the correct multiplier year-by-year as your age decreased in prior years.

The tool caps this at £700 for statutory but uses full weekly pay for PENP and enhanced benchmarking.

Sector drives the enhanced multiplier range. Typical multipliers shown in the FAQ.

Critical for PENP. If your contract has a PILON clause AND you're paid PILON, tick both — that zeros the PENP exposure.

See statutory amount, sector-typical enhanced range, tax breakdown and net figure.

Statutory service is calculated YEAR BY YEAR using the age the employee reached during that year. A 50-year-old with 20 years' service had: 9 years at age 41+ (1.5 × 9 = 13.5 weeks) + 11 years at age 22–40 (1.0 × 11 = 11 weeks) = 24.5 weeks. This "looking-back" methodology rewards long-tenured older workers more than a straight age multiplier. The 20-year cap means anything beyond 20 years adds no statutory weeks.

Three distinct arrangements with different tax treatments: (1) WORK notice = notice paid as normal salary, fully taxable. (2) GARDEN LEAVE = employed but not working, paid as salary, fully taxable. (3) PILON with contractual clause = payment instead of working notice, fully taxable BUT may shelter under the £30k allowance if part of overall termination package. (4) PILON without contractual clause = PENP rules apply, taxed as earnings with NI, no £30k shelter. The PENP formula is: (basic pay × unworked notice weeks) — basic pay excludes bonuses, commissions, allowances.

Skilled employment solicitors structure settlements to maximise the £30k shelter: (1) Clearly identify ex-gratia "compensation for loss of office" (tax-free up to £30k). (2) Separate contractual bonuses and commissions (fully taxable). (3) Use pension contributions (up to £60k annual allowance) to shelter higher-value payments. (4) Spread income across tax years (March vs April payment dates). A £150k settlement can differ by £15–£20k in net depending on structuring. Always involve a tax-experienced employment solicitor for large settlements.

Redundancy becomes UNFAIR DISMISSAL if: (1) the employer didn't consult properly (2 weeks minimum for 20+ redundancies; 30 days for 20–99; 45 days for 100+); (2) selection criteria were discriminatory; (3) suitable alternative employment wasn't offered; (4) the redundancy isn't genuine (role filled by someone else within months). Compensation: up to £105,707 (April 2025 cap) PLUS a basic award mirroring statutory redundancy. Settlement agreements typically preempt these claims for 6–12 months salary, making them attractive vs a long Tribunal route.