How is statutory redundancy pay calculated? (UK, 2026)

Statutory redundancy pay is worked out from three things: age, full years of continuous service (capped at 20), and weekly pay (capped at £751 for redundancies on or after 6 April 2026). For each full year worked you get half a week's pay, one week's pay, or one and a half weeks' pay, depending on the employee's age during that year. The most an employer must pay under the statutory scheme is £22,530.

This guide covers Great Britain (England, Wales and Scotland). Northern Ireland has separate legislation and different statutory rates.

You can get an instant figure with our Statutory Redundancy Pay Calculator — (results are estimates only and don't replace legal or payroll advice) — and the rest of this article explains exactly how that number is reached.

When does statutory redundancy pay apply?

Statutory redundancy pay applies only where there is a genuine redundancy under employment law — broadly, where the business or a workplace closes, or the need for employees to do work of a particular kind has ceased or diminished.

The formula

For every full year of continuous service, an employee is entitled to:

• half a week's pay for each full year they were under 22;
• one week's pay for each full year they were 22 or older but under 41;
• one and a half weeks' pay for each full year they were 41 or older.

Two limits then apply:

• Only the most recent 20 complete years of continuous service are counted.
• A "week's pay" is capped at £751 (for redundancies on or after 6 April 2026). Pay above the cap does not increase the statutory figure.

Because of those two caps, the maximum statutory redundancy payment is £22,530 (20 years × 1.5 weeks × the £751 cap).

A worked example

Say an employee is 45 years old, has 12 full years of continuous service, and earns £500 a week (below the cap, so the cap doesn't bite here):

• The most recent 4 years (the years they were 41–44) — 1.5 weeks each = 6 weeks.
• The earlier 8 years (aged 22–40) — 1 week each = 8 weeks.
• Total = 14 weeks' pay — 14 × £500 = £7,000.

(This assumes all 12 years are complete years of continuous service and the employee earned £500 a week throughout the relevant period.) If the same person earned £900 a week, the weekly figure would be capped at £751, so the calculation would use £751 for each of those 14 weeks. Our calculator applies the age bands, the 20-year cap and the weekly-pay cap automatically.

Who qualifies

Employees with at least 2 years' continuous service generally qualify, although certain categories of employment are excluded or subject to different statutory rules. "Continuous service" is defined by employment legislation and can, in some situations, include periods when the employee was not actually at work.

Statutory redundancy pay is the legal minimum. Employers are free to offer contractual ("enhanced") redundancy pay that exceeds it — check the contract, staff handbook or any collective agreement.

How "a week's pay" is worked out

For employees with fixed hours and regular pay, a week's pay is normally their usual weekly gross wage at the date notice is given. For employees with variable hours or pay, it is the average earned over the previous 12 weeks in which pay was payable — in each case then subject to the £751 cap.

What to do next

• Work out a figure now with the Statutory Redundancy Pay Calculator.
• Running the whole process fairly? The Redundancy Process Pack (England & Wales) gives the letters — at-risk, consultation invite and redundancy notice — in the order you need them.