Redundancy Pay UK: How Much Will You Get?
The redundancy number in the letter is not the number that hits your account. A statutory cap, a PILON tax trick and a holiday-pay catch shave thousands off before you see it.
UK statutory redundancy pay 2025/26
| Age band | Weeks per year | Weekly cap | Service cap |
|---|---|---|---|
| Under 22 | 0.5 weeks | £719 | 20 years |
| 22 to 40 | 1 week | £719 | 20 years |
| 41 and over | 1.5 weeks | £719 | 20 years |
| Maximum payment | 30 weeks | £719 | £21,570 total |
First £30,000 of any redundancy payment is tax-free. PILON and holiday pay are taxed and NI-d in full.
Key takeaways
Statutory redundancy uses 0.5, 1, or 1.5 weeks of pay per year of service depending on the age you were during each year. Service is capped at 20 years and weekly pay is capped at £719 (2025/26).
The first £30,000 of any redundancy payment is tax-free. Anything above is taxed as income at your marginal rate (no NI).
Pay in lieu of notice (PILON) and untaken holiday pay are fully taxable AND subject to National Insurance, regardless of the £30,000 threshold.
Use the calculator to model statutory and enhanced offers side by side, see the tax split, and estimate your real take-home before negotiating with HR.