How much statutory redundancy pay should you receive?
If you have been in the same job for two years or more and are made redundant you will usually be entitled to a redundancy payment. The legal minimum that you are entitled to receive is known as ‘statutory redundancy pay’. There are exceptions where you are not entitled to statutory redundancy pay, such as if your employer offers to keep you on or offers you suitable alternative work which you refuse without good reason.
The amount of statutory redundancy pay you are entitled to is dependent on your age and your length of service.
The payment is calculated based on the following:
- Under 22 - half a week’s pay for each full year of service
- Aged 22 to 40 - one week’s pay for each full year of service
- Over 41 - one and half week’s pay for each full year of service
Weekly pay is capped at £489 and the maximum length of service is capped at 20 years. In addition, the maximum statutory redundancy pay you can get is capped at £14,670 in 2017/18. There is a slightly higher cap in Northern Ireland.
Of course, an employer can decide to make a higher payment, or you may be entitled to one as a result of your employment contract. There is an overall £30,000 limit for redundancy pay which is tax free, regardless of whether this is your statutory redundancy pay or a higher pay-out from your employer.
Source: HM Revenue & Customs | 15-11-2017