How to Calculate Statutory Redundancy Pay in the UK: Step-by-Step Guide

Introduction

Small UK businesses live and die by a handful of numbers: margin, break-even and cash flow. Staff also need to know their statutory rights on pay.

This guide explains how to calculate statutory Redundancy Pay in the UK, step by step. Work out statutory redundancy pay from your age, service and weekly pay. You'll see the formula, a fully worked example and practical tips for UK readers.

What this calculation covers

Work out statutory redundancy pay from your age, service and weekly pay.

Clear numbers help you price profitably, chase late invoices with confidence and understand statutory pay entitlements.

The method and formula

You get half a week's pay for each full year worked under 22, one week for each year aged 22 to 40, and one and a half weeks for each year aged 41 or over. Service is capped at 20 years and weekly pay is capped.

Every figure on our redundancy Pay Calculator follows this method, so you can check the working yourself.

Worked example

Here's a typical example using these figures:

Running them through the method gives:

The headline figure is statutory redundancy pay: £8,400.00. Change any input and the result will move with it.

How to use the calculator

1. Enter or choose your age.
2. Enter or choose full years of service.
3. Enter or choose weekly pay before tax (£).
4. Enter or choose weekly pay cap (£).
5. Read your results. The main figure is shown at the top, with a breakdown underneath.
6. Try different values to compare scenarios side by side.

Tips for UK readers

• Price from margin, not markup, if you want to hit a target profit percentage.
• Quote prices to businesses ex VAT and to consumers inc VAT.
• You can legally claim statutory interest on late B2B invoices.
• Statutory pay rates usually change every April – check GOV.UK.

Frequently asked questions

What's the quickest way to work out statutory Redundancy Pay?

Use our free redundancy Pay Calculator. It applies this method automatically: You get half a week's pay for each full year worked under 22, one week for each year aged 22 to 40, and one and a half weeks for each year aged 41 or over. Service is capped at 20 years and weekly pay is capped.

Are statutory pay figures up to date?

Rates are editable on each calculator. Defaults reflect recent published rates; always confirm current figures on GOV.UK.

Do these work for sole traders?

Yes. Margin, markup and break-even apply to any business size.

Is this legal advice?

No. For disputes about pay, redundancy or debts, contact Acas, Citizens Advice or a solicitor.

Summary

To work out statutory Redundancy Pay, follow the method above: You get half a week's pay for each full year worked under 22, one week for each year aged 22 to 40, and one and a half weeks for each year aged 41 or over. For a quick, accurate answer with your own figures, use the calculator.

Next, read Statutory Redundancy Pay: Common Mistakes, Tips and FAQs.