Statutory redundancy pay by age and years of service.
Your details
Statutory redundancy pay
£3,720
Breakdown
| Capped weekly pay | £620 |
| Years counted | 6.0 / max 20 |
| Weeks at 0.5× (under 22) | 0.0 |
| Weeks at 1× (22–40) | 6.0 |
| Weeks at 1.5× (41+) | 0.0 |
| Total weeks | 6.0 |
| Statutory redundancy pay | £3,720 |
Interactive scenarios
Tax and deductions, your way
Tax year
Region
Pay schedule
Salary £45,000
Net (monthly)
£2,806
Income tax (monthly)
£541
NI (monthly)
£216
Effective rate
20.2%
The full guide
Worked examples with real figures, the order payroll applies them in, and the traps that catch people out.
Statutory redundancy pay depends on age, length of service and weekly pay, with a cap on the weekly figure and a limit of twenty years of service.
It is the floor, not the offer. Knowing the floor is what makes the conversation about anything above it a real negotiation.
Deductions are not a flat set that each take a bite of the same cake. They run in sequence, and the sequence decides the cost of every one after the first.
Pension goes first under salary sacrifice, leaving gross pay before tax and National Insurance ever see it. Under relief at source it leaves net pay instead and HMRC tops the pot up. Same percentage on paper, different payslip.
Income tax then applies band by band against the tax code. National Insurance follows, worked out per pay period rather than across the year. Student loan sits on top of all of it and never reduces taxable pay.
Change the order and the answer changes. That is why a payslip with the same gross as a colleague's can pay a different net.
Pay flow
Gross, pension, tax, National Insurance, net
Service under forty two counts as one week a year, service at forty one and above counts as one and a half. Ten years split across that birthday gives a mix of the two.
Weekly pay is capped for the statutory calculation, so a high salary does not raise the statutory figure past the cap even though the contract might.
The first £30,000 of a redundancy payment is free of income tax and National Insurance. Anything above it is taxed, and pay in lieu of notice is taxed in full regardless.
Worked payslip
Gross to net, line by line
Sample payslip
Month 06 · 2025/26Gross pay
£2,916.67
Pension (5%)
£145.83
Taxable pay
£2,770.84
Income tax
£373.83
National Insurance
£149.52
Net pay
£2,247.66
A tax code change mid year. HMRC adjusts the code, payroll applies it, and the letter explaining it rarely gets read. Check the code on the payslip against the one you expect.
A taxable benefit such as private medical cover. It shrinks the allowance, so a perk raises the tax bill and take home falls in the month it starts.
A switch to salary sacrifice. Gross drops before anything else, which changes every line beneath it and can affect mortgage affordability too.
A bonus month. Income tax evens out across the year through the cumulative system. National Insurance never does.
Rates, bands and thresholds follow published HMRC and gov.uk figures for the 2025/26 tax year, held in one table that every tool reads. April arrives, the table changes, and the results move together.
Earlier years stay available through the year selector, so a late self assessment runs on the numbers that applied at the time rather than today's.
Some cases still need an accountant. K codes carrying negative allowances, bespoke sacrifice arrangements, the annual allowance taper for very high earners, and anything involving two employments at once.
Redundancy Pay Calculator answers one question. The salary calculator turns gross into net, the income tax calculator splits the bill by band, the National Insurance calculator shows the step at the upper limit, and the pension calculator prices a percentage change three ways at once.
Every tool reads the same rate table, so two pages never disagree. Run this one, note the figure, then open the next and watch which line moves.
Cash is the floor of a decision, not the decision. An hour a day handed back by a shorter commute is roughly two hundred and fifty hours a year, and nothing prices that against a manager worth working for.
Some benefits convert cleanly. Health cover has a taxable value, a learning budget has a receipt, extra leave has a daily rate. Share options that vest over four years and enhanced parental leave do not, so weigh those separately rather than treating them as salary.
Example gallery
Real inputs, real outputs
Graduate starter
First job, default workplace pension.
Gross / yr
£28,000
Pension
5%
Income tax
£3,086
NI
£1,234
Mid career
Standard tax code, modest pension uplift.
Gross / yr
£45,000
Pension
6%
Income tax
£6,486
NI
£2,594
Higher rate
Crossing the higher rate band.
Gross / yr
£72,000
Pension
8%
Income tax
£16,232
NI
£3,451
Scotland mid
Scottish bands applied.
Gross / yr
£45,000
Pension
5%
Income tax
£6,928
NI
£2,594
About this calculator
Statutory redundancy pay is calculated by age band and years of continuous service. Weekly pay is capped (£719 for 2025/26) and a maximum of 20 years is counted.
Quick reference
Questions are added here as readers send them in.