WORKPLACE ANSWER
Am I Entitled to Redundancy Pay?
Understand whether you may qualify for statutory redundancy pay, how the amount is worked out and whether your employer offers enhanced redundancy terms.
Quick Answer
If you're an employee with at least two years' continuous employment and you're being made redundant, you will normally qualify for statutory redundancy pay.
How much you receive depends on your age, length of continuous service and gross weekly pay, subject to statutory limits. Your employer may also offer enhanced or contractual redundancy pay above the statutory minimum.
There are circumstances that can affect entitlement, so it is important to check how your employer has reached its calculation and what your contract or redundancy policy says.
Do I Qualify for Statutory Redundancy Pay?
Statutory redundancy pay normally applies where:
- you are legally classed as an employee
- you have at least two years' continuous employment with your employer
- your employment is ending because you are being made redundant
Individual circumstances can affect entitlement, and your employer's enhanced redundancy scheme may have different eligibility rules.
How Is Statutory Redundancy Pay Calculated?
Statutory redundancy pay is based on your age, complete years of continuous employment and your gross weekly pay.
The basic statutory calculation is:
- half a week's pay for each full year of employment when you were under 22
- one week's pay for each full year of employment when you were aged 22 to 40
- one and a half weeks' pay for each full year of employment when you were aged 41 or over
Only a maximum of 20 years' service can be used in the statutory calculation.
Statutory redundancy pay is also subject to a maximum weekly-pay figure and an overall maximum payment.
The statutory weekly-pay limit and maximum redundancy payment can change, so check the current figures or use the GOV.UK statutory redundancy pay calculator when checking an amount.
What Counts as My Weekly Pay?
Statutory redundancy pay uses your gross weekly pay before tax.
If your pay varies, the calculation may need to use an average over a relevant period. Elements such as contractual overtime, bonuses or commission may be relevant depending on your normal pay arrangements.
This page does not provide a detailed payroll guide, so check the calculation you have been given and ask your employer to explain how your weekly pay has been worked out if you are unsure.
Could I Receive More Than Statutory Redundancy Pay?
Statutory redundancy pay is the legal minimum for eligible employees. Some employers provide enhanced or contractual redundancy pay on top of, or instead of, the statutory minimum.
To understand whether this applies to you, check:
- your employment contract
- any redundancy policy
- your staff handbook
- any relevant collective agreement
- the written redundancy proposal or offer
- information your employer has provided about an enhanced redundancy scheme
An enhanced scheme may use different eligibility rules or a more generous calculation than the statutory minimum. Not every employer offers enhanced redundancy pay.
Can an Alternative Job Affect My Redundancy Pay?
Your employer may offer you suitable alternative employment instead of making you redundant.
In some circumstances, unreasonably refusing suitable alternative employment can affect entitlement to statutory redundancy pay.
Whether another role is suitable can depend on factors such as:
- the type of work
- pay and contractual terms
- skills required
- status
- working hours
- location
- your individual circumstances
Where the statutory rules on suitable alternative employment apply, there is normally a four-week trial period in the alternative role.
This page does not tell you that you must accept any alternative role, and refusing a role does not automatically remove redundancy pay in every case. It depends on the circumstances and whether the alternative is genuinely suitable.
Things To Think About
- How long have I continuously worked for my employer?
Am I legally classed as an employee?
What is my normal gross weekly pay?
Does my contract or redundancy policy provide enhanced redundancy pay?
Has my employer shown me how my redundancy payment was calculated?
Have I been offered an alternative role?
Are notice pay, holiday pay and other amounts being shown separately from redundancy pay?
Do I understand when my redundancy payment will be made?
What Other Payments Might I Receive?
Redundancy pay is not necessarily the same thing as your total final payment.
Depending on the circumstances, your final payments might separately include:
- statutory or enhanced redundancy pay
- salary owed up to your termination date
- notice pay or payment in lieu of notice where applicable
- payment for accrued but untaken holiday
- other contractual sums that are due
Check the breakdown rather than assuming every amount in your final payment is redundancy pay. This page does not provide detailed tax calculations.
What Happens Next
Once redundancy is confirmed, your employer should normally explain:
- whether redundancy pay applies
- how your redundancy payment has been calculated
- whether an enhanced payment applies
- when the payment will be made
- what other final payments are due
You should receive information showing how your statutory redundancy payment has been calculated.
Ask your employer for clarification if you do not understand the calculation or believe information such as your service, age or pay has been recorded incorrectly.
If your concern is about the final redundancy decision rather than just understanding the figures, see: How do I appeal a decision at work?
Frequently Asked Questions
Do I need two years' service to receive redundancy pay?
Statutory redundancy pay normally requires at least two years' continuous employment. Your employer's enhanced redundancy scheme, if there is one, may have different eligibility rules.
How is statutory redundancy pay calculated?
It uses your age, full years of continuous employment and your gross weekly pay, subject to statutory limits and a maximum of 20 years' service.
Is there a maximum statutory redundancy payment?
Yes. Statutory redundancy pay is capped by a maximum weekly-pay figure and an overall maximum payment. The figures can change, so check the current GOV.UK guidance or use the statutory redundancy pay calculator.
Important: WorkAnswers provides general workplace information, not legal advice. Entitlement to redundancy pay can depend on your individual circumstances, your employment contract and your employer’s policies.
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