Being made redundant means losing your job because your employer no longer needs your role or needs fewer people to carry out particular work. It can follow a closure, reorganisation or relocation. The practical questions are whether the process is fair, when your employment ends and what you should be paid.
This guide explains the rules in England, Scotland and Wales, with a separate section for Northern Ireland. Information checked on 3 October 2026.
What counts as redundancy?
Redundancy concerns the employer’s need for work to be done. It is not a disciplinary penalty. If the real reason for dismissal is alleged misconduct or poor performance, the employer should use the relevant procedure. A letter labelled “redundancy” does not by itself establish that a dismissal is lawful. Acas explains when redundancy can happen.
Your employment status matters. Statutory redundancy pay is an employee right: not everyone who works for a business has employee status. With agency work or a zero-hours arrangement, check how the relationship actually operates rather than relying on the contract’s label.
Who can receive statutory redundancy pay?
You normally need at least two years’ continuous employment with your employer. Your contract or the company’s redundancy policy may offer enhanced redundancy pay. Ask for a breakdown showing the statutory amount and any additional payment. See GOV.UK and Acas.
Having less than two years’ service does not remove the need to check outstanding wages, notice entitlements and holiday pay. These are separate parts of the final settlement.
How is statutory redundancy pay calculated?
For each full year of service included in the calculation, the entitlement is:
- half a week’s pay for a year when you were under 22;
- one week’s pay for a year when you were aged 22–40;
- one and a half weeks’ pay for a year when you were 41 or older.
Only up to 20 years count. Different years may fall into different age bands. For redundancies on or after 6 April 2026 in Great Britain, the weekly pay cap is £751 and the maximum statutory payment is £22,530. Weekly pay is based on average earnings in the 12 weeks before the redundancy notice. Acas: redundancy pay.
A straightforward example
Anna is 35, has five full years of continuous service and average gross weekly pay of £600. All five years fall within the 22–40 age band. Her statutory redundancy calculation is 5 × 1 × £600 = £3,000. Notice pay and unused holiday must be checked separately. This illustrates the calculation rather than providing an individual assessment.
Ask for the written calculation and compare the start date, full years of service, ages and earnings with your own records. Acas also explains payment arrangements and exceptions to entitlement.
Notice and unused holiday are separate entitlements
The statutory minimum notice is one week after at least one month’s employment, one week per full year for service between two and 12 years, and 12 weeks for longer service. Your contract may give you more. Payment in lieu of notice (PILON) may be used where the contract or an appropriate agreement allows it. GOV.UK: notice periods.
When employment ends, accrued but untaken statutory holiday must be paid. Additional contractual leave can have separate arrangements. Read GOV.UK’s leaving-a-job guidance and our guide to annual leave entitlement in the UK.
Is redundancy pay taxable?
The first combined £30,000 of qualifying redundancy and other relevant termination benefits is usually exempt from Income Tax. This does not make the whole final payment tax free. Outstanding wages, holiday pay and notice pay are generally subject to tax and National Insurance. Enhanced severance can also involve Post-Employment Notice Pay (PENP). Ask payroll to show each component and its deductions. HMRC: tax on termination payments.
Consultation and fair selection
Consultation should give you the opportunity to discuss the reasons for proposed redundancies and alternatives. There is no statutory minimum consultation period where fewer than 20 redundancies are proposed, but a fair process still matters. GOV.UK: consultation.
Collective consultation rules apply where an employer proposes at least 20 redundancies at one establishment within 90 days. Consultation must start at least 30 days before the first dismissal for 20–99 redundancies, or at least 45 days beforehand for 100 or more. GOV.UK: collective consultation.
Selection criteria should be objective, such as skills or documented performance. Selecting someone because of Polish nationality, pregnancy or disability would raise discrimination concerns. Attendance scoring must not include absences related to disability, pregnancy or maternity. Ask to see the criteria and your scores if the decision is unclear. Acas: selection criteria.
If you are offered another role
Alternative vacancies should be considered. Whether a role is suitable depends on its duties, pay, hours, location and your circumstances. Unreasonably refusing suitable alternative employment can mean losing statutory redundancy pay. A four-week trial period normally applies. Some employees within pregnancy or relevant parental-leave protection periods have priority for a suitable available vacancy. GOV.UK: suitable alternative employment.
If you will have two years’ continuous service by the end of your notice, you may be entitled to reasonable time off to find another job or arrange training. The statutory payment for this time is limited to 40% of one week’s pay in total unless the employer offers more. GOV.UK: time off for job hunting.
What to do if the process or payment seems wrong
Keep your contract, payslips, letters, meeting dates, redundancy calculation and any alternative job offer. Raise a specific error in writing. If you challenge the selection or process, use the employer’s appeal procedure. Acas explains redundancy appeals.
Do not assume an internal appeal stops a tribunal deadline. For most Great Britain claims involving events on or after 1 October 2026, the limit is six months minus one day; earlier events can have shorter deadlines. Statutory redundancy pay claims normally have six months minus one day. Early conciliation affects the calculation. Contact Acas promptly and check the time limit for your particular claim.
If your employer is insolvent, government payments may cover some amounts owed, subject to separate limits. Start with the Insolvency Service guidance.
Northern Ireland and keeping this guide up to date
Do not automatically use Great Britain’s payment caps in Northern Ireland. At the date of this guide, nidirect gives a weekly cap of £783 and a maximum statutory redundancy payment of £23,490. The Labour Relations Agency provides advice, and disputes go to an Industrial Tribunal. nidirect: redundancy pay.
Check monetary limits for the relevant dismissal date. The announced reduction in the qualifying period for ordinary unfair dismissal in Great Britain in 2027 does not itself reduce the two-year requirement for statutory redundancy pay. Get independent advice on the consequences before signing a settlement agreement.
Sources
Main references: GOV.UK: Redundancy — your rights, Acas: Your rights during redundancy, HMRC: termination payments, Acas: tribunal time limits and nidirect. Detailed source links appear alongside the relevant sections.