What is Statutory Redundancy Pay?

Full Definition

Statutory redundancy pay is the minimum amount an employer must pay an employee who is made redundant after at least two years of continuous service. It is calculated using an age-banded formula based on each full year worked: half a week's pay for each year under age 22, one week's pay for each year aged 22 to 40, and one and a half weeks' pay for each year aged 41 and over, capped at 20 years. Weekly pay is subject to a statutory cap (reviewed each April) and the overall payment is also capped. Crucially, the first £30,000 of any redundancy payment — statutory or enhanced contractual — is free of Income Tax and National Insurance in 2026/27; amounts above £30,000 are taxed and employer NI applies to the excess. Many employers pay more generous contractual redundancy on top of the statutory minimum.

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