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Redundancy Pay Calculation

How to Calculate Redundancy Pay

The redundancy payment due to each employee under the statutory redundancy payment scheme depends on his or her age and length of service (up to twenty years). This determines the number of weeks pay due, which is then subject to a limit on weekly pay.
To calculate the number of weeks pay due, you should use the following amounts –

• 0.5 week's pay for each full year of service where age during year less than 22
• 1.0 week's pay for each full year of service where age during year is 22 or above, but less than 41
• 1.5 weeks' pay for each full year of service where age during year is 41+

Employers using the above amounts to calculate an employee’s entitlement to redundancy pay should note that where an employee’s service crosses two bands, the figures in each band should be added together. For example -

Example 1 - if the employee is 25 years old with 7 completed years’ service, they will be entitled to 5 weeks’ redundancy pay. The 5 weeks entitlement is based on 0.5 weeks’ pay for each completed year of service between age 18 and 22 and 1 week’s pay for each completed year of service between age 22 and 25. (The middle band of 1 weeks’ pay only applies where an employee, who is entitled to a redundancy payment, has completed a year service at age 22 or above).

Example 2 - if the employee is 38 years old and has 12 completed years’ service, they will be entitled to 12 weeks’ redundancy pay. The 12 weeks is based on 1 week’s pay for each completed year of service between age 26 and 38.

Example 3 – if the employee is 49 years old and has 15 completed years’ service, they will be entitled to 19 weeks redundancy pay. The 19 weeks’ entitlement is based on 1 week’s pay for each completed year of service between age 34 and 41 and 1.5 weeks’ pay for each completed year of service between age 41 and 49.

The maximum week's pay that an employee is entitled to under the statutory scheme is £380. 

Statutory Redundancy Pay Table

To calculate the number of weeks redundancy pay, cross reference the employee's age and number of  completed years’ service and then multiply that number by the weekly salary (maximum weekly salary is £380 ). E.g. a person with aged 22 with 4 years of service will be entitled to two weeks salary
The table starts at age 17, as it is possible for a 17 year old to have 2 years service. Compulsory school leaving age can be 153/4 or 154/5 where a child is 16 before 1 September. Particular care should be taken when calculating an individual’s redundancy pay when they joined as an employee below the age of 16.
The table stops at age 61 because for employees age 61 and over, the payment remains the same as for age 61.

Statutory redundancy pay table
	Service (Completed Years)
Age	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20
17*	1
18	1	1½
19	1	1½	2
20	1	1½	2	2½	-
21	1	1½	2	2½	3	-
22	1	1½	2	2½	3	3½	-
23	1½	2	2½	3	3½	4	4½	-
24	2	2½	3	3½	4	4½	5	5½	-
25	2	3	3½	4	4½	5	5½	6	6½	-
26	2	3	4	4½	5	5½	6	6½	7	7½	-
27	2	3	4	5	5½	6	6½	7	7½	8	8½	-
28	2	3	4	5	6	6½	7	7½	8	8½	9	9½	-
29	2	3	4	5	6	7	7½	8	8½	9	9½	10	10½	-
30	2	3	4	5	6	7	8	8½	9	9½	10	10½	11	11½	-
31	2	3	4	5	6	7	8	9	9½	10	10½	11	11½	12	12½	-
32	2	3	4	5	6	7	8	9	10	10½	11	11½	12	12½	13	13½	-
33	2	3	4	5	6	7	8	9	10	11	11½	12	12½	13	13½	14	14½	-
34	2	3	4	5	6	7	8	9	10	11	12	12½	13	13½	14	14½	15	15½	-
35	2	3	4	5	6	7	8	9	10	11	12	13	13½	14	14½	15	15½	16	16½
36	2	3	4	5	6	7	8	9	10	11	12	13	14	14½	15	15½	16	16½	17
37	2	3	4	5	6	7	8	9	10	11	12	13	14	15	15½	16	16½	17	17½
38	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	16½	17	17½	18
39	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	17½	18	18½
40	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	18½	19
41	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	19½
42	2½	3½	4½	5½	6½	7½	8½	9½	10½	11½	12½	13½	14½	15½	16½	17½	18½	19½	20½
43	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21
44	3	4½	5½	6½	7½	8½	9½	10½	11½	12½	13½	14½	15½	16½	17½	18½	19½	20½	21½
45	3	4½	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21	22
46	3	4½	6	7½	8½	9½	10½	11½	12½	13½	14½	15½	16½	17½	18½	19½	20½	21½	22½
47	3	4½	6	7½	9	10	11	12	13	14	15	16	17	18	19	20	21	22	23
48	3	4½	6	7½	9	10½	11½	12½	13½	14½	15½	16½	17½	18½	19½	20½	21½	22½	23½
49	3	4½	6	7½	9	10½	12	13	14	15	16	17	18	19	20	21	22	23	24
50	3	4½	6	7½	9	10½	12	13½	14½	15½	16½	17½	18½	19½	20½	21½	22½	23½	24½
51	3	4½	6	7½	9	10½	12	13½	15	16	17	18	19	20	21	22	23	24	25
52	3	4½	6	7½	9	10½	12	13½	15	16½	17½	18½	19½	20½	21½	22½	23½	24½	25½
53	3	4½	6	7½	9	10½	12	13½	15	16½	18	19	20	21	22	23	24	25	26
54	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	20½	21½	22½	23½	24½	25½	26½
55	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22	23	24	25	26	27
56	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22½	23½	24½	25½	26½	27½
57	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22½	24	25	26	27	28
58	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22½	24	25½	26½	27½	28½
59	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22½	24	25½	27	28	29
60	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22½	24	25½	27	28½	29½
61+	3	4½	6	7½	9	10½	12	13½	15	16½	18	19½	21	22½	24	25½	27	28½	30