Answers · UK 2025/26
What is the maximum weekly pay used to calculate redundancy in 2026/27?
The weekly pay cap for statutory redundancy calculations rises each April. The cap was £700/week for the 2025/26 tax year. For 2026/27, the new cap is expected to be approximately £719/week, following the standard annual uprate. This means the maximum statutory redundancy pay rises to approximately £21,570 (30 weeks x £719). Always verify the current rate at gov.uk.
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The weekly pay cap is an important figure in redundancy calculations because it limits the amount of weekly salary that can be used in the statutory redundancy formula, regardless of actual earnings. **Confirmed cap: £700/week (April 2025 to March 2026)** This is the cap used for redundancies that occur between 6 April 2025 and 5 April 2026. **Estimated cap: approximately £719/week (April 2026 onwards)** The cap is reviewed annually and typically uprated by September CPI inflation. The 2026 figure will be confirmed by HMRC approximately in February/March 2026. Always verify with gov.uk or HMRC for the exact in-force amount. **Maximum statutory redundancy pay** The maximum redundancy entitlement uses: - Maximum 20 years of service - Maximum 1.5 weeks per year (for those aged 41+) - Maximum weekly pay at the cap At £700/week cap: 20 x 1.5 x £700 = £21,000 maximum At estimated £719/week cap: 20 x 1.5 x £719 = £21,570 maximum **Worked example -- high earner** Sophia earns £2,000/week. She is made redundant aged 50 with 15 years' service. Her actual weekly pay exceeds the cap, so the calculation uses £700 (or £719 from April 2026): - 15 years all aged 41+: 15 x 1.5 x £700 = £15,750 (2025/26 cap) - Estimated 2026/27: 15 x 1.5 x £719 = £16,177 Sophia receives the same amount as a colleague earning £700/week -- the cap protects the public purse regardless of salary level. **Employees earning below the cap** If you earn less than the weekly cap (for most people earning under £36,400/year), your actual gross weekly pay is used in the calculation. Note: weekly pay for redundancy purposes is calculated based on your pay in the 12 weeks before the redundancy notice, including regular overtime but excluding discretionary bonuses. **Tax** Statutory redundancy pay is tax-free up to £30,000 as part of the termination payment exemption. Since the maximum statutory amount (£21,570) is below £30,000, statutory redundancy pay is almost always entirely tax-free.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.