UK Redundancy Pay Calculator 2026/27
Statutory redundancy + PILON + notice pay + holiday pay + tax breakdown + year-by-year table — complete redundancy package in seconds
| Year of Service | Your Age | Multiplier | Weekly Pay Used | Weeks' Pay |
|---|
UK Redundancy Pay Calculator 2026/27 — Everything You Need to Know
Being made redundant is one of the most stressful workplace experiences. There is so much to process at once — the shock, the practical questions about your next job, and underneath all of it, the pressing financial question: how much am I actually owed? This calculator gives you the complete picture in seconds, covering every component of a UK redundancy package using the current 2026/27 HMRC rates confirmed by SI 2026/310.
The calculation uses the Employment Rights Act 1996 formula. Your statutory entitlement depends on three things: your age during each year of service, your length of continuous service with the same employer (capped at 20 years), and your gross weekly pay (capped at £751 from 6 April 2026). This calculator applies the age-banded multiplier year by year — not just your current age applied uniformly — which is the legally correct method.
The Three Key Numbers for 2026/27
- Weekly pay cap: £751 — up from £719 in 2025/26, set by The Employment Rights (Increase of Limits) Order 2026 (SI 2026/310), effective 6 April 2026. If your gross weekly pay exceeds £751, only £751 is used in the statutory calculation.
- Maximum payout: £22,530 — calculated as 30 weeks (the maximum achievable with 20 years all above age 41) times the £751 cap. The maximum is reached by very few people in practice.
- Tax-free threshold: £30,000 — the first £30,000 of combined statutory and enhanced redundancy pay is exempt from Income Tax and National Insurance. Statutory redundancy pay is virtually always below this threshold, so it is almost always completely tax-free.
The Age-Banded Formula — How Each Year Is Scored
The statutory formula does not apply a single multiplier based on your current age. Instead, it scores each year of service based on how old you were during that year. For each complete year of continuous employment:
- Under age 22 during that year: 0.5 week's pay
- Aged 22 to 40 during that year: 1 week's pay
- Aged 41 or over during that year: 1.5 weeks' pay
This is why the year-by-year table in this calculator matters — if you started work at 19 and are now 45 with 26 years of service, only the last 20 count, and each of those 20 years gets the multiplier for the age you were during that year. The total is different from simply multiplying your current age bracket by 20 years.
Years 3–7 (aged 33–37): 5 years × 1 week × £500 = £2,500
Total statutory redundancy: £3,500 — fully tax-free.
Real-World Examples at 2026/27 Rates
| Profile | Age | Service | Weekly Pay | Statutory Payout |
|---|---|---|---|---|
| Junior employee | 24 | 2 yrs | £450 | £900 |
| Mid-career professional | 35 | 8 yrs | £700 | £5,600 |
| Senior manager | 45 | 14 yrs | £1,200 (capped £751) | £14,269 |
| Long-service employee | 55 | 22 yrs (20 count) | £900 (capped £751) | £22,530 |
| Young graduate | 26 | 3 yrs | £520 | £1,560 |
PILON — Payment in Lieu of Notice
PILON is the payment your employer makes if they end your employment immediately rather than allowing you to work your notice period. It sounds like an extra bonus but it is simply your notice pay brought forward. PILON is always fully taxable — Income Tax and National Insurance apply to the full amount, and it sits completely outside the £30,000 tax-free threshold. This is one of the most common misconceptions about redundancy packages. Many people assume their entire payout is tax-free, only to receive a smaller net figure because PILON was included and taxed normally.
Statutory Minimum Notice Periods
Even if you are not being paid PILON, your employer must give you a statutory minimum notice period (or its equivalent in PILON if they want you to leave immediately). The statutory minimum is:
- 1 week for each complete year of service
- Minimum: 1 week. Maximum: 12 weeks (capped at 12 years of service)
- Your employment contract may specify a longer period — you are entitled to whichever is greater
Holiday Pay on Redundancy
Any annual leave you have accrued but not taken by your redundancy date must be paid out. Holiday pay is calculated at your normal daily rate and is taxable as employment income in full — there is no tax-free treatment for holiday pay. If your employer refuses to pay accrued holiday, this is a breach of the Working Time Regulations 1998 and you can claim via ACAS or an Employment Tribunal.
What Qualifies as Continuous Service?
Continuous service means unbroken employment with the same employer. Breaks in employment generally reset the clock, but there are important exceptions: statutory maternity, paternity, and adoption leave counts as continuous service; periods of sickness where the employment relationship continues count; and transfers under TUPE (Transfer of Undertakings) preserve continuity even when the employer changes. Part-time employees accrue the same redundancy entitlement as full-time employees on a pro-rata basis.
What to Do If Your Employer Won't Pay
If you have 2 or more years of continuous service and have been genuinely made redundant, your employer is legally required to pay your statutory entitlement. If they refuse or dispute the amount, your options are:
- Contact ACAS: Free early conciliation service before going to tribunal. Mandatory first step in most Employment Tribunal claims.
- Employment Tribunal: You have 6 months from the effective date of termination to make a claim. No fee for redundancy pay claims since 2017.
- Redundancy Payments Service (RPS): If your employer is insolvent and cannot pay, the RPS pays you directly from the National Insurance Fund. The statutory redundancy element, holiday pay, and up to 8 weeks' arrears of pay are all recoverable this way.
❓ UK Redundancy 2026/27 — Frequently Asked Questions
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