To calculate a statutory redundancy payment enter the details & click 'calculate'
Redundancy payment calculator
Calculation results
Redundancy calculation breakdown
Number of weeks redundancy pay due
Weekly redundancy pay amount
Total redundancy
Total redundancy pay due
Qualification
Statutory redundancy pay is what every qualifying employee is entitled to when there are no better contractual entitlements. The contract of employment can not deny or diminish these employee rights.
To qualify an employee must:
have had a minimum of two years continuous service
be either full or part time
There are is no upper age limit.
The lower age limit is the school leaving age in your region, most employees will be 18 before they qualify for redundancy but it is possible to qualify at 17 depending upon the regional school leaving age. Care should be taken when calculating the the service years of a 17 year old.
Notice
Notice of redundancy should be given in line with the statutory notice periods. Failure to give the appropriate notice may lead to the employee being entitled to more redundancy pay than they would otherwise.
The calculation
The payment amount is reached by taking a number of factors into account:
Only the last twenty years of service are included
Identifying how many years service fall within the following age bands
41 years and over
22 to 40 years old
up to 21 years old
Allocating respectively the following number of weeks pay per year:
1.5 weeks
1 week
0.5 weeks
Calculating the amount of a 'week's pay'. Generally this is the average of the preceding 12 weeks gross pay, but overtime and bonus rates are usually substituted with the normal hourly rate. A maximum of £400.00 per week 1st February 2011 is used to calculate the amount to pay.
Payment
Payment under £30,000 is made free of tax and NI contributions.
Redundancy is not 'easy dismissal'
Redundancy is not a convenient way to get rid of employees. There are only two statutory definitions of circumstances that would lead to redundancy as a fair dismissal, and, in general, only three reasons why those circumstances would arise.
