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Redundancy pay calculator
Your statutory entitlement under 2026/27 rules, the £30,000 tax-free allowance, and what the whole package is worth after tax.
Your package after tax
£5,200
£5,200 statutory entitlement (8 weeks at £650)
- Statutory redundancy pay£5,200
- Total package£5,200
- Tax-free£5,200
- Taxable£0
- After tax£5,200
At £2,000/month of essentials, that covers about 2.6 months of job hunting. See how that compares to a proper buffer in the emergency fund calculator.
The first £30,000 of statutory plus enhanced redundancy pay is tax-free. Anything above is taxed as income with no employee National Insurance (your employer pays Class 1A NI on it instead); notice pay is always taxed like normal salary. Estimate only, rUK rates, your payroll may differ.
Common questions
- Is redundancy pay taxable?
- The first combined £30,000 of statutory plus any enhanced redundancy pay is tax-free. Anything above that is taxed as income at your marginal rate, but with no employee National Insurance; your employer pays Class 1A NI on the excess instead. Notice pay never gets the exemption.
- What is the difference between notice pay and redundancy pay?
- Redundancy pay compensates you for losing the job; notice pay (or payment in lieu of notice, PILON) is salary for the notice period you were owed. PILON is always taxed and NI'd like normal wages and does not count towards the £30,000 tax-free allowance, even when it is paid in the same lump sum.
- How much is statutory redundancy pay in 2026/27?
- Half a week's pay for each full year worked under 22, one week for years aged 22 to 40, and one and a half weeks for years aged 41 or over. Weekly pay is capped at £751 and service at 20 years, so the maximum is £22,530. You need at least 2 full years' service to qualify.
- What if my employer is insolvent and cannot pay?
- You can claim statutory redundancy pay, unpaid wages, holiday pay and notice pay from the government's Insolvency Service (the Redundancy Payments Service) instead. Claims are paid at statutory rates and caps, not at any enhanced contractual rate, and you apply online once the insolvency is confirmed.
- Can I negotiate more than the statutory minimum?
- Often, yes. Many employers pay enhanced redundancy under contract or as part of a settlement agreement, especially if you have leverage like a weak consultation process. A settlement agreement only binds you if you take independent legal advice on it, which the employer usually funds. Enhanced amounts share the same £30,000 tax-free allowance.
- What support is there while I look for a new job?
- You may be able to claim New Style Jobseeker's Allowance (based on your NI record, not savings) or Universal Credit (means-tested, so a large redundancy payout in the bank can reduce it). Check both on gov.uk soon after your end date; claims are not backdated by default.
Stretching the payout while you job hunt? The emergency fund calculator sizes your runway and the budget planner finds the cuts that extend it. Starting a new job afterwards? Run the tax code checker so an emergency code does not overtax your first payslips.
Guidance, not advice. Statutory figures apply to England, Scotland and Wales for redundancies on or after 6 April 2026; Northern Ireland runs a near-identical scheme with its own weekly cap. Settlement agreements and tribunal questions deserve proper legal advice.