UK money
Redundancy pay and tax calculator
Statutory weeks, the £751 cap, and the £30,000 tax-free slice.
Last updated: October 2026
How to use it
- Enter your age when the job ends, and the number of complete years with that employer.
- Enter a week’s pay. Statutory redundancy uses the 2026/27 cap where your pay is higher.
- Add any extra redundancy, pay in lieu of notice and holiday pay separately. The £30,000 exemption applies to the redundancy, not to pay in lieu or holiday pay.
How it's calculated
Statutory redundancy needs 2 complete years. It counts back up to 20 years. A year that ends at age 41 or over is 1.5 weeks. A year that ends at 22 to 40 is 1 week. A younger year is half a week. Weekly pay is capped at £751.00 for a redundancy on or after 6 April 2026, so the maximum is 30 weeks, £22,530.00.
The first combined £30,000.00 of statutory and extra redundancy is free of income tax. Anything above that is taxed through payroll. Pay in lieu of notice, holiday pay, unpaid wages and bonuses are earnings. They are taxed in the normal way and they do not use the £30,000.00. This page does not work out post-employment notice pay (PENP), employee National Insurance on those earnings, or the employer’s Class 1A National Insurance on the slice above £30,000.00. Northern Ireland sets its own weekly cap. The figure here is the GOV.UK cap for a redundancy on or after 6 April 2026.
Worked examples
Age 61 and 20 complete years, with weekly pay of £900, is capped at £751.00. Every counted year ends at 41 or over, so the award is 30 weeks, £22,530.00. That is the maximum GOV.UK states for a redundancy on or after 6 April 2026.
Age 30 and 8 complete years, at £500 a week, is 8 weeks because each year ends between 22 and 40. The pay is under the cap, so statutory redundancy is £4,000.00.
The maximum statutory amount plus £15,000 of extra redundancy is £37,530.00. £30,000.00 of that is inside the exemption and £7,530.00 is taxable redundancy. Pay in lieu of £4,000 and holiday pay of £1,000 are a further £5,000.00 of taxable earnings, outside the exemption.
Sources
GOV.UK: statutory redundancy pay, GOV.UK: tax and National Insurance on termination payments.
I check these figures after each Budget or Finance Act and when a rate changes. The calculation runs in this browser. Nothing you type is stored or uploaded. Corrections: [email protected].
Questions
What if I have less than two years’ service?
GOV.UK says statutory redundancy pay normally needs two years or more with that employer. This page then shows no statutory amount. A contractual payment can still exist, and the £30,000 treatment can still apply to it.
Is the weekly cap my actual wage?
Only up to £751 for a redundancy on or after 6 April 2026. A higher wage is capped for the statutory sum. A redundancy before 6 April 2026 used a lower cap, which this page does not apply.
Does pay in lieu of notice use the £30,000?
No. GOV.UK treats pay in lieu of notice, holiday pay, unpaid wages and bonuses as earnings. They are taxed and liable to National Insurance in the normal way.
What is left out of the tax estimate?
Post-employment notice pay, the exact payroll National Insurance on the earnings, Scottish income tax, and the employer’s Class 1A charge on the amount over £30,000. If you enter other taxable pay, the income-tax line is a rest-of-UK estimate only.
Are my figures stored?
No. The age, years and amounts stay in this browser. Nothing is uploaded.