Statutory redundancy pay

The statutory redundancy pay cap is £544 per week from 6th April 21 (previous rate was capped at £538 per week).

Statutory redundancy pay is based on age, weekly pay, and the number of continuous years of service with the employer. Where earnings vary; the weekly pay is the average of earnings per week over the 12 weeks before the day the employee’s redundancy notice. To qualify for statutory redundancy pay you must have 2 or more continuous years of service. 

Example:

Alice has been employed by her employer since 1 February 2015; she works full time and earns £700 per week.  She is to be made redundant on 31st May 2021 at the age of 25. She has 6 years completed years of service at the termination date. 

Her statutory redundancy entitlement is:

4.5 weeks @ £544 (the cap in force from April 2021) = £2448

For each full year of service, the calculation is based on the following:

Up to age 22 = half a week’s pay

Age 22 to 40 = 1 weeks’ pay

Age 41 and older = 1.5 weeks’ pay

As Alice’s actual weekly earnings are above the statutory redundancy payment cap, the calculation is based on the cap payment in force at the time. 

Click here to access the .gov redundancy calculator. 

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