Redundancy pay
calculator
Statutory minimum, the £30,000 tax-free split, and the PILON trick employers use to make a worse package look generous. Calculate before you sign anything.
Statutory minimum
Age-banded weeks, capped at 20 years × £700/week (April 2025 rate).
£30k tax-free split
Tax-free amount and taxable portion clearly separated.
PILON trap warning
Flags the common employer trick of disguising taxable PILON as redundancy pay.
Redundancy pay calculator
Work out statutory redundancy pay, the £30,000 tax-free limit, and the taxable portion above it.
Capped at £700/wk for statutory.
If your employer is offering above statutory.
Statutory rates by age
Common questions
Who's entitled to statutory redundancy pay?
Anyone with 2+ years of continuous service who's been made genuinely redundant. The redundancy must be a real business reason — your role no longer needed, the workplace closing, or the business shutting. If they replace you, it's not redundancy and it's likely unfair dismissal.
How much is statutory redundancy?
Half a week's pay for each year of service under 22, one week per year aged 22–40, and 1.5 weeks per year aged 41 and over. Capped at 20 years of service and £700/week of pay (rates effective April 2025, rising annually). The maximum statutory payout is currently £21,000.
Is redundancy pay taxable?
The first £30,000 of genuine redundancy pay is tax-free and free of NI. Anything above £30,000 is taxed as income at your marginal rate. Importantly, this £30,000 only applies to TRUE redundancy compensation — notice pay (PILON), holiday pay and earned bonuses are taxable in full.
What's PILON and why does it matter?
PILON = Payment In Lieu Of Notice. If your employer pays you out instead of working your notice, that money is taxable in full — even if they label it as part of the redundancy package. Some employers try to slip PILON inside the £30,000 tax-free limit. It shouldn’t go there. HMRC will catch it eventually and the bill lands on you.
Can I negotiate my redundancy package?
Yes. Statutory is the floor, not the ceiling. Many employers offer enhanced packages, especially during voluntary redundancy rounds. Things to negotiate: enhanced multipliers (2x or 3x statutory), longer notice/PILON, immediate pension contributions for the rest of the year, and a positive reference. Get any agreement in writing — ideally in a Settlement Agreement reviewed by a solicitor.
Redundancy looking suspicious?
If you’ve been pushed out of a role that’s being filled by someone else, or the consultation process feels like a stitch-up, this might be unfair dismissal. We’ll help you write the letter.
Start your free complaint