Redundancy Cost Calculator UK 2025/26

Statutory redundancy pay in the UK is calculated using a formula based on the employee’s age, length of service, and weekly pay — capped at £700 per week for the 2025/26 tax year. Employees aged 41 and over receive 1.5 weeks’ pay for each complete year of service, those aged 22 to 40 receive 1 week per year, and those under 22 receive half a week per year, with a maximum of 20 years counted. For a 45-year-old employee with 10 years’ service earning £40,000 per year, the statutory redundancy payment would be approximately £10,500 (10 years at 1.5 weeks each, capped at £700 per week). Many employers offer enhanced packages of 1.5 to 3 times the statutory minimum. The first £30,000 of any redundancy payment is tax-free, with amounts above this threshold subject to income tax and National Insurance. This calculator provides a precise breakdown of statutory and enhanced redundancy costs including notice pay obligations.

How to Use This Calculator

Enter the employee’s annual gross salary — the calculator will cap weekly pay at £700 as per statutory rules.

Input the employee’s age and complete years of service (minimum 2 years to qualify for statutory redundancy).

Select the package level — statutory minimum or an enhanced multiplier (1.5×, 2×, or 3×).

Review the full breakdown including redundancy payment, notice pay, tax-free portion, and total cost to the employer.