Leading Immigration Lawyers With Over 9000 Applications Approved
Call +44 (0)333 414 9244 | Mon - Sun, 8.30am -6pm

Redundancy Calculator: How to calculate redundancy pay

If you are an employee, and have worked continuously for at least two years for your employer, you have rights to a statutory redundancy payment if you are being made redundant. In the event that you can’t get statutory redundancy pay, you might be possible to get contractual redundancy pay. Make sure you check your contract to see what it says about redundancy pay.

For more information about calculating redundancy pay, including what you need to do to be eligible for it, how to receive it, and expert advice, reach out to us today on 0333 305 9375 or contact us online.


Overview of Redundancy Pay

You’ll only get paid if you have genuine redundancy. There are 2 types of redundancy pay you could possibly get:

Statutory redundancy pay – this kind of redundancy is what’s stated and due according to law. It is also based on a fixed-term contract of at least two years which expires and is not renewed as a result of the redundancy.

Contractual redundancy pay – in contractual redundancy pay, you could get extra money already stipulated by the agreement or contract signed with your employer. The amount is a plus to the statutory amount already set by the law.

How To Calculate Redundancy Pay?


Redundancy pay is established on your earnings before tax (called gross pay). Your redundancy pay will be issued on an utmost of 20 years’ work. For instance, if you’ve worked at your job for 23 years, you’ll only get redundancy pay for the last 20 years you worked.

How much your employer reimburses depends on how old you were during that year of your employment. You’ll get:

  • half a week’s pay for each year you were aged under 22
  • 1 week’s pay for each year you were aged 22 to 40
  • 1.5 weeks’ pay for each year you were aged 41 or older. If you turned 22 or 41 while working for your employer, the higher rates only apply for the full years you were over 22 or 41.

What is the Redundancy week’s pay?

Your week’s pay is the average you earned each week in the 12 weeks before you got your redundancy notice.

The maximum week’s pay is £571. The amount increases on 6 April each year. The maximum week’s pay possible depends on when your employment ends.

What Is the Length of Service?

This is the time you’ve worked for your employer. It is determined by counting the number of full years you’ve worked for your employer. Your length of service should start on your first day at work and finish on the day you were made redundant.

Your length of service might become difficult to determine if:

  • you weren’t given the statutory notice period you were entitled to by agreement
  • you were given pay instead of notice

In the event that you face any of the above situations, you can figure out your length of service by adding on the amount of statutory notice allowed as per agreement or stated by the law. For example, if you were privileged to 4 weeks’ statutory notice but your employer only provided 2 weeks, you are allowed to add another 2 weeks in order to determine your end date.

Who can get statutory redundancy pay?

You can get statutory redundancy pay if you:

  • have worked for your employer for a continuous minimum of 2 years
  • were made redundant at your job because there was a genuine need to make redundancies in your workplace
  • if your employer recognises you as an employee
  • If you’re on a fixed-term contract. You might be an employee even if your employer or your contract says you’re self-employed.

You will be qualified to statutory redundancy pay if your employer doesn’t continue your fixed-term contract because the job doesn’t exist any more and you had either:

  • a fixed-term contract for 2 years or more
  • shorter contracts that followed on from each other and added up to 2 years or more.
Leaving work

Our expert lawyers can advice you on how to obtain your redundancy pay.

Who won’t get statutory redundancy pay?

You won’t get statutory redundancy pay if you:

  • have worked with your employer for less than 2 years
  • are self-employed
  • are a police officer or in the armed forces
  • are any Crown servant, parliamentary staff or holder of public office (for example, a Justice of the Peace)
  • are a share fisherperson
  • are domestic staff working for your immediate family
  • are an employee of a foreign government

When you could lose your right to statutory redundancy pay?

Even if you’re qualified to statutory redundancy pay, you could forfeit your right to it if you:

  • decline a suitable alternative job your employer proposed to you without a good justification
  • want to leave before the job is scheduled to end – for instance, because you’ve found another job
  • are terminated for insensitive misconduct before your job finishes

Common issues with statutory redundancy pay

  • You’re getting sick pay
  • You’re on maternity leave
  • Your hours change each week
  • You work overtime
  • you’ve agreed on a temporary drop in wages
  • you’ve been laid off or put on short-time working
  • If your company’s been taken over
  • If the business you work for has closed down
Giving advice

If your employer has refused to pay your redundancy pay, we can help.

What to do if you do not Receive Your Redundancy Pay?

Your employer should pay your redundancy pay in the same way they paid your wages. If they don’t, you can take steps to get your pay.

There are things you can do to claim money your employer owes you – including statutory redundancy pay.

What you need to do depends on whether your employer is ‘insolvent’. This is a legal process an employer goes through if they can’t pay their debts and have to close. It’s also known as being in ‘liquidation’ or ‘administration’.

You should check if your employer is insolvent if they’ve:

  • closed down but you can’t get in touch with them
  • said they’re insolvent but no one has told you what to do to claim your money – this means they might not really be insolvent
  • If your employer is insolvent
  • Check if you can get contractual redundancy pay

Take the following steps to remind your employer about your overdue payments:

Step 1: write your former employer a letter

Inform them of your entitlements and include any evidence you have to support your claims. It’s advisable you do this through an employment lawyer so your claims are taken with utmost seriousness. Do reach out to us on 0333 305 9375 or contact us online to help you.

Step 2: early conciliation

If you don’t get your payment after sending your letter, you need to contact recognised agencies or bodies necessary to resolve such conflicts of interest.

Step 3: take your employer to a tribunal

This should be your last resort. Going to a tribunal can be costly and stressful. It is a good idea to get advice from your IAS Law before you go ahead.

Your deadline for pleading any redundancy pay you’re entitled to is six months minus a day from the last day you were employed. If you’re also claiming unfair dismissal or notice pay, then you have 3 months less a day.

What Is Contractual Redundancy Pay?

You may qualify to receive extra money from your employer on top of the statutory amount stated by law. This is called ‘contractual’ or ‘enhanced’ redundancy pay. Make sure you check your agreement to know what you deserve to get.

If you were not given a valid contract or your contract doesn’t include contractual redundancy policies, ask your employer or check your staff handbook or intranet.

By law, your contractual redundancy pay can’t be less than the statutory amount.

Paying tax on contractual redundancy pay

You don’t have to pay tax on the first £30,000 of your redundancy pay. For any redundancy pay over £30,000, your employer will usually take the tax at your normal tax rate.

If your employer pays you your final pay after you leave your job, they’ll take the tax from your redundancy pay at the basic rate of 20%. If you pay a higher tax rate, you need to call HMRC to arrange to pay the extra tax.

Call us, for guidance or enquiries about applying for redundancy pay.

Corporate work outfit

How to get your Redundancy Pay

Your employer should pay you your redundancy pay on the date you leave work, or an agreed date soon after.

They’ll pay you in the same way they paid your wages, for example into your bank account.

Your employer has to tell you in writing how your redundancy pay was calculated and when you’ll get your payment.

How Can IAS Help?

We are a formidable team of professional and knowledgeable employment lawyers with years’ of experience working in UK employment law. We have helped countless people overcome hurdles to settle employment law issues and obtain what they deserve.

Whether you need expert advice on how to obtain or calculate your redundancy pay, your employer has refused to pay, or you received lower than what you believe should have been your redundancy pay, we can help.

We can provide advice or reach out to your employer on your behalf to ensure you get what is yours by law. For more information about how we can help, reach out to us today on 0333 305 9375 or contact us online.

We offer immigration advice sessions as face to face appointments at all of our UK offices, or via the phone.

Table of Contents

Table of Contents will appear here.

Related Posts

Architectural building with Canadian flag on top
17 May 2024

Open Work Permit Canada for Nigerians

Canada has a growing economy that allows immigrants to explore different career Opportunities. Nigerian citizens who wish to work in Canada can be granted an open work permit provided the employee and employer meet the eligibility requirements.
For further information on how to apply for an open work permit, contact The Immigration Advice Service (IAS) at +23413438882 and +44 (0) 3316300929. Our immigration lawyers are ever ready to help you with the application process.

Read Article
Silver, antique Canadian coin
17 May 2024

Canada Visa Requirements for Nigeria

If you are a Nigerian looking to go to Canada, you must apply for a Canadian Visa to work, visit or study there.

Read Article
Two friends standing together on street in America
17 May 2024

Easiest Way to Get American Visa from Nigeria

If you’re a Nigerian waiting to visit the US, you’ve probably heard about an easy way to get an American visa. However, there’s no easy visa; you must meet the necessary requirements.
For more information about applying for an American Visa from Nigeria, including support and advice about the process, or any other queries you might have, then call our immigration experts today at +23413438882 and +44 (0) 3316300929 or contact us online.

Read Article
Nigeria welcome sign on white arch
17 May 2024

Entry to the UK from Nigeria

To live and work in the UK, you will need a visa. This guide will give you all the information you need about the type of visa you should apply for and other criteria you need to consider when making an application for entry to the UK from Nigeria.

Read Article
Nigerian man wearing purple coloured shirt
17 May 2024

How Much Is Priority UK Visa in Nigeria?

If you are applying for a UK visa to either stay short-term or settle there, you can apply to fast-track your visa application from Nigeria if you need to obtain a visa at short notice.
Immigration Advice Service (IAS) are available to advise you on the different fees and processing times depending on your visa and what level of priority you require. Call us today on +23413438882 or +44 (0) 3316300929 or you can contact us online.

Read Article
Student stepping outside, through glass door
17 May 2024

Study Gap for UK Student Visa from Nigeria

You may want to take a break from your studies before applying to study in the UK; but do study gaps impact your UK Study visa and do UK universities offer courses for international students?
Immigration Advice Service (IAS) can help you apply for a Study visa in the UK and provide advice on your study gap. Call us on +44 (0) 3316300929 and +23413438882, or message us online.

Read Article

Get in touch with our team

Learn about our professional services and find out how we can help.

Contact Us