Redundancy payments

Stephen SimpsonEditor's message: All employees who have completed at least two years' continuous service are entitled to a statutory redundancy payment.

The amount is calculated using the employee’s length of service and age during that service, together with their weekly pay. However, length of service is limited to 20 years and there is a statutory cap on the value of a week's pay.

Some employers offer enhanced contractual redundancy terms that go beyond the statutory minimum. For example, an employer could offer redundancy pay based on the statutory formula, but using the employee’s actual week's pay (ie removing the statutory cap on a week’s pay).

Visit our 2022 benchmarking survey on redundancy experiences and expectations to find out how many redundancies employers made last year, and their expectations for redundancies this year. The survey is based on responses from 177 organisations with a combined workforce of 215,171 employees.

Stephen Simpson, principal employment law editor

New and updated

About this topic

HR and legal information and guidance relating to redundancy payments.

Redundancy pay calculator

  • Does the impact of the coronavirus mean your organisation is planning redundancies? Use the redundancy pay calculator to work out your statutory redundancy payment liabilities.

Redundancy payments: key resources