UK Redundancy Pay: Eligibility, Calculation, and Employee Rights

Redundancy can be a difficult experience for employees, but UK redundancy pay laws provide financial support to those affected. If you are made redundant, you may be entitled to a statutory redundancy payment (SRP) or an enhanced redundancy package from your employer.
In this article, we’ll cover who is eligible for redundancy pay in the UK, how it is calculated, notice periods, and employee rights.
What is Redundancy Pay?Redundancy pay is a financial compensation given to employees who lose their jobs due to downsizing, company closure, or restructuring. In the UK, redundancy pay is divided into:
1?? Statutory Redundancy Pay (SRP) – The legal minimum amount employers must pay.
2?? Contractual (Enhanced) Redundancy Pay – Additional pay offered by employers as part of company policy or individual contracts.
Who is Eligible for UK Redundancy Pay?To qualify for statutory redundancy pay, you must:
?? Have worked for your employer for at least two years continuously.
?? Be an employee (not a freelancer or contractor).
?? Be made redundant due to genuine business reasons (not dismissed for misconduct or performance issues).
You will not qualify for redundancy pay if:
? You have worked for less than two years.
? You were dismissed for misconduct.
? You were offered a suitable alternative job by the same employer and refused without a valid reason.
How is Redundancy Pay Calculated?Statutory redundancy pay in the UK is calculated based on:
?? Your Age
?? Your Length of Service (in full years)
?? Your Weekly Gross Pay (capped at £643 per week for 2024)
Statutory Redundancy Pay Rates (2024)

• Under 22 years old – Half a week’s pay per full year of service.
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• Ages 22 to 40 – One week’s pay per full year of service.
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• Ages 41 and above – One and a half week’s pay per full year of service.
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Example CalculationIf a 45-year-old employee earns £500 per week and has worked for 10 years, their redundancy pay would be:

• 4 years (ages 22–40) × 1 week’s pay = £2,000
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• 6 years (ages 41+) × 1.5 week’s pay = £4,500
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• Total Redundancy Payment = £6,500
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?? Maximum statutory redundancy pay in the UK (2024) is £19,290.
Notice Periods for RedundancyEmployers must provide notice before redundancy based on the length of service:

• Less than 2 years – No statutory notice required.
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• 2 to 12 years – 1 week’s notice per year of service.
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• 12 years or more – 12 weeks’ notice.
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?? Employers may offer pay in lieu of notice (PILON) instead of requiring employees to work their notice period.
Other Employee Rights During RedundancyIf you are made redundant, you are entitled to:
?? Redundancy Consultation – Employers must discuss redundancies with affected employees.
?? Time Off to Find a New Job – Employees with at least two years of service can take paid leave to job hunt.
?? Appeal Against Unfair Redundancy – If you believe redundancy was unfair, you can challenge it through an employment tribunal.
?? Holiday Pay & Final Wages – You must be paid for any unused annual leave and wages owed.
Enhanced (Contractual) Redundancy PaySome employers offer enhanced redundancy packages, which may include:
?? Higher redundancy pay than the statutory minimum.
?? Extended notice periods or gardening leave.
?? Retraining programs or career transition support.
Check your employment contract or company policies to see if you qualify for additional redundancy benefits.
What to Do If You Are Made Redundant?1?? Check Your Employment Rights – Confirm your redundancy pay, notice period, and final salary entitlements.
2?? Negotiate with Your Employer – Some employers may offer an enhanced redundancy package.
3?? Seek Legal Advice – If you suspect unfair redundancy, contact ACAS (Advisory, Conciliation and Arbitration Service) or an employment solicitor.
4?? Claim Redundancy Pay – If your employer refuses to pay, you can file a claim with an employment tribunal.
5?? Apply for Government Support – If you are struggling financially, check if you are eligible for Universal Credit or Jobseeker’s Allowance.
ConclusionRedundancy pay in the UK provides financial relief to employees who lose their jobs due to business restructuring. Understanding your eligibility, how redundancy pay is calculated, and your rights during redundancy ensures that you receive the correct compensation.
If you have been made redundant, make sure you review your contract, negotiate your package, and seek legal advice if necessary to protect your financial future.