Redundancy pay by age band
Each full year aged Under 22
½ week
of pay
Each full year aged 22 to 40
1 week
of pay
Each full year aged 41 and over
1½ weeks
of pay
Run a fair redundancy process
Pay is only one part of a lawful redundancy: you also need a genuine reason, a fair selection pool, consultation (collective consultation for 20 or more redundancies) and an offer of suitable alternative work. Employees on or returning from maternity leave have priority for suitable vacancies.
Frequently asked questions
How is statutory redundancy pay calculated?
Counting back from the date employment ends, the employee gets half a week’s pay for each full year they were under 22, one week’s pay for each full year aged 22 to 40, and one and a half weeks’ pay for each full year aged 41 or over. Service is capped at 20 years and weekly pay is capped.
What is the weekly pay cap for redundancy in 2026?
For redundancies on or after 6 April 2026, a week’s pay is capped at £751 in England, Scotland and Wales, giving a maximum statutory payment of £22,530. In Northern Ireland the cap is £783 and the maximum is £23,490.
Who qualifies for statutory redundancy pay?
Employees with at least 2 years’ continuous service who are dismissed by reason of redundancy. Workers and the self-employed do not qualify.
Is redundancy pay taxable?
Statutory redundancy pay is tax-free, and redundancy payments are tax-free up to £30,000 in total. Notice pay and holiday pay are taxed as normal earnings.
What else must an employer pay on redundancy?
Notice pay (or pay in lieu), accrued but untaken holiday, and any contractual redundancy pay above the statutory minimum.
What happens to a sponsored worker who is made redundant?
You must report that you have stopped sponsoring them within 10 working days. The Home Office will normally shorten their visa, usually to 60 days, to give them time to find a new sponsor or leave the UK.
Official sources
Rules and fees checked September 2026. Immigration rules change often — this tool gives general information, not legal or immigration advice. For advice on an individual case, speak to a regulated immigration adviser or one of the firms listed here.