Statutory Redundancy Pay Calculator
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How to calculate what redundancy pay you’re entitled to.
What is Statutory Redundancy?
If your employment is terminated by reason of redundancy, and you’ve been in your job for more than 2 years, you will be entitled to Statutory Redundancy Pay. There may also be other payments due to you on termination such as notice pay and accrued holiday pay.
When is Statutory Redundancy paid?
Employment must be terminated because of redundancy for Statutory Redundancy Pay to be due. In brief terms, redundancy can happen where:
- the employer has a reduced need for people to do a particular job and reduces headcount in the relevant team/department, or
- the employer decides to remove a particular, usually unique, role from the organisation structure, or
- the employer closes the business completely or closes the workplace at which the employee worked.
When is Statutory Redundancy not paid?
If employment is terminated for another reason – say, misconduct, resignation or because of poor performance – a Statutory Redundancy Payment will not be due to the employee.
How do you calculate Statutory Redundancy Pay?
Statutory Redundancy Pay is calculated on a formula, based on your age, length of service, and weekly pay. Weekly pay is capped at a set amount, which changes every year. The current figure is on our Employment Facts & Figures blog.
Your dismissal must be due to redundancy.
The Statutory Redundancy formula
[Appropriate amount] x [number of years’ service] x [weekly pay, subject to cap]
The “Appropriate amount” is:
- 0.5 week’s pay for each complete year of service in which employee was under 22
- 1 week’s pay for each complete year of service in which employee was 22-40
- 1.5 weeks’ pay for each complete year of service in which employee was 41 or over
A “week’s pay” is subject to a cap which is set each year. For instance, the cap applicable from April 2022 to April 2023 is £571. However, if the employee earns less than the capped amount, their calculation will be based on their actual weekly pay.
What is the maximum Statutory Redundancy pay?
The maximum Statutory Redundancy Pay entitlement is based on 20 years’ service. The maximum applicable from April 2022 to April 2023 is therefore £17,130 (= 1.5 x 20 x £571 for someone who has 20 years’ service, all at age 41 or more).
Employment Law Solicitors
If you need help with Statutory Redundancy Pay calculations, or other employment law issues, do just get in touch at firstname.lastname@example.org.
You may also find our pages on dismissals and unfair dismissal of use. The main thing is to get advice before you make the leap to dismiss an employee, to avoid the many trips and pitfalls that can result if you get it wrong.
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