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How much redundancy pay am I entitled to?

The amount of statutory redundancy pay you are entitled to depends on a number of factors.

Length of service

You will be entitled to statutory redundancy pay if you have worked for your employer for at least two years. For the purpose of calculating redundancy pay, your service length is capped at 20 years.

Age during employment

Your general pay allowance will differ depending on your age during your employment. For each full year of employment, you will be entitled to:

  • Half a weeks’ pay if you were 22 years or younger
  • One weeks’ pay if you were aged between 22 and 41 years
  • One and a half weeks’ pay if you were 41 years or older

Date of redundancy

If you became redundant on or after 6 April 2018, your weekly pay is capped at £508. This means the highest statutory redundancy pay you can receive is £15,240 (calculated at one and a half weeks’ pay of £508 for 20 years). If you became redundant before 6 April 2018, this amount will be lower.

You can also claim redundancy pay if:

  • you’re eligible; and
  • you have temporarily been laid-off without pay or less than half a weeks’ pay; and
  • the lay-off lasts for more than:
    • 4 weeks in a row; or
    • more than 6 non-consecutive weeks within a 13 week period

You have to tell your employer in writing that you intend to claim within 4 weeks of your last non-working day within the 4 or 6 week period. Your employer may reject your claim if your normal work will likely resume within 4 weeks and continue for at least 13 weeks.

Higher rates

Your employment contract may stipulate a higher rate of redundancy pay or your employer may negotiate a higher rate with you. You may want to take legal advice before accepting any offer made by your employer.

Notice required

In addition to your redundancy pay, you are entitled to redundancy notice. Your employer can insist that you continue to work (and be paid) during your notice period. Alternatively, they may not require you to work your notice, offering ‘pay in lieu of notice’ instead.

Tax obligations

You may be entitled to tax-free ‘pay in lieu of notice’ if this is stipulated in your employment contract.

There is a tax-free threshold on all redundancy pay (including any severance pay) less than £30,000.

Exceptions

You will not be entitled to redundancy pay if:

  • Your employer decides to continue employing you
  • You refuse a suitable alternative role within the company without valid reason
  • Your employment is terminated due to misconduct
  • You work as:
    • a merchant seaman
    • former registered dock worker
    • a civil servant (including police officers and members of the armed services)
    • an apprentice who has not reached the end of their apprenticeship or who is not an employee at the end of their training
    • a domestic servant who is a member of the employer’s immediate family

More information

You can calculate your statutory redundancy pay using the government’s online calculator.

If you would like legal advice specific to your situation, contact one of our specialist employment solicitors on 08082747557

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