Step 1: confirm you qualify
Statutory redundancy pay is only for employees with at least 2 years' continuous employment with the same employer, dismissed because the business, workplace or need for employees of your kind has ceased or diminished. Contractors, agency workers and employees dismissed for gross misconduct do not qualify. If you are unsure about your status, settle that first — the formula below is worthless without it.
Step 2: count complete years, most recent 20 only
Count back from your last day of employment and take only complete years: 9 years and 11 months counts as 9. Then apply the 20-year cap — only your most recent 20 years count, so a 30-year career contributes the same 20 years as a 20-year one, and the years that drop off are your earliest, usually lowest-multiplier years.
Step 3: apply the age multiplier to each year
| Your age during that year | Weeks' pay per year |
|---|---|
| Under 22 | 0.5 |
| 22 to 40 | 1 |
| 41 and over | 1.5 |
Each year is banded by your age during that year, counting back from your leaving date — so one career can span all three bands. Add the weeks together: that total is the number of weeks' pay you are owed.
Step 4: work out your capped weekly pay
Take your average gross weekly pay over the 12 weeks before your redundancy notice, then cap it at £751 a week (Great Britain, redundancies from 6 April 2026; £783 in Northern Ireland). Earn £480 a week and your real figure is used; earn £1,100 and the calculation uses £751. This cap is the single biggest reason high earners are surprised by their statutory figure.
Step 5: multiply — then check the result
Two worked examples. A 38-year-old with 11 years' service on £650 a week: all 11 years fall in the 22–40 band, so 11 weeks × £650 = £7,150. A 55-year-old with 25 years on £900 a week: only the most recent 20 years count — 6 years at 22–40 (6 weeks) and 14 years at 41+ (21 weeks) = 27 weeks, and pay is capped at £751, so 27 × £751 = £20,277. Run the same inputs through GOV.UK's calculator; if your employer's figure differs, one of these five steps was applied wrongly.
Three mistakes that shrink payouts
First, using take-home pay instead of gross pay: the formula uses pay before tax. Second, counting part years or service before the 2-year qualifying point as if they added weeks — they do not. Third, forgetting what the figure excludes: statutory notice pay, accrued holiday pay and any pension contributions are separate entitlements paid on top, and contractual or enhanced redundancy pay sits above the statutory floor, not instead of it. If your contract promises more, the statutory figure is the minimum, not the offer.
To run your own numbers, use the redundancy pay calculator, and for what happens to notice pay alongside it see the notice pay and PILON guide.