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News & Portal: Payroll and Employment

Redundancy rights and pay

24 April 2020  
Posted by: ACAS
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You have redundancy rights if:

  • you’re legally classed as an employee
  • you've worked continuously for your employer for 2 years before they make you redundant

Redundancy pay

How much redundancy pay you get depends on:

  • your age
  • how long you’ve worked for your employer

You might get more than the minimum amount the law says you should get (‘statutory’), if it’s in your contract.

If you're not sure if you're classed as an employee, it’s a good idea to check your employment status and talk to your employer.

How redundancy pay is worked out

Redundancy pay is based on:

  • your earnings before tax (gross pay)
  • the years you've worked for your employer
  • your age

If you're aged 22 or under

Your employer must give you half a week's pay for each full year you've worked. 

If you're aged 22 to 41

Your employer must give you:

  • 1 week's pay for each full year you worked after age 22
  • half a week's pay for each full year you worked before that

If you're aged 41 or over

Your employer must give you:

  • 1.5 week's pay for each full year you worked after age 41
  • 1 week's pay for each full year you worked when you were between 22 and 41
  • half a week's pay for each year you worked before age 22

Your employer must tell you in writing how your redundancy pay has been worked out.

Calculate your redundancy pay

You can use the redundancy pay calculator on GOV.UK.

You'll need to know your weekly pay (before tax and other deductions) to use the calculator.

How you'll get paid

Your employer should tell you:

  • when you’ll get your redundancy pay – this should be no later than your final pay date, unless you both agree another date in writing
  • how you’ll get paid, for example in your monthly pay or separate payments

Up to £30,000 of redundancy pay is tax free.

You may not be eligible for statutory redundancy pay if your employer offers you a suitable alternative job and you turn it down.

Limits on redundancy pay

There are limits to how much redundancy pay you can get. You can only get it for up to 20 years of work.

This means, for example, that if you’ve worked for your employer for 22 years you’ll only get redundancy pay for 20 of those years.

The maximum weekly amount used to calculate redundancy pay is £525 – even if your wage is more per week.

The maximum statutory redundancy pay you can get in total is £15,750.

You have to claim for any unpaid redundancy within 6 months of your job ending.

If your employer does not pay you

If you do not get your redundancy pay you need to:

  1. Write to your employer as soon as you can. The date you should get your redundancy pay should be no later than your final pay date, unless you and your employer agree another date in writing.
  2. Tell them what you’re entitled to and include any evidence to back it up. For example, you could include a letter that states your first day at work or an email confirming a recent pay increase.

Call the Acas helpline if you still do not get paid after writing to your employer. We can talk through your options but cannot give you legal advice.

If you’ve tried all options without success, you might be able to make a claim to an employment tribunal.


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