Made Redundant? Here's How to Work Out What You're Owed in 2026

If you've been told your role is at risk, the numbers around statutory redundancy pay changed this year — and they're more generous than many people realise. Here's how to work out what you're entitled to, step by step.

The basic entitlement

Statutory redundancy pay depends on your age, length of service, and weekly pay, capped at a maximum figure set each April. From 6 April 2026, the statutory cap on a week's pay rose from £719 to £751, and the maximum total statutory redundancy payment is now £22,530, according to redundancycalculator.uk. The formula is set out on gov.uk:

• Half a week's pay for each full year worked while under 22
• One week's pay for each full year worked aged 22–40
• One and a half weeks' pay for each full year worked aged 41 or older

Only your last 20 years of service count, and you need at least two full years of continuous employment to qualify at all.

The tax angle

The first £30,000 of any redundancy payment — statutory or enhanced — is tax free, per gov.uk. Anything above that is taxed as income, so if your employer is offering an enhanced package, ask HR to show you the breakdown between the tax-free and taxable portions before you agree to anything.

A bigger change: collective redundancy protections

If your employer is making 20 or more people redundant at one site and fails to properly consult, the penalty just got much steeper. From 6 April 2026, the maximum "protective award" for failure to consult on collective redundancies doubled to 180 days' uncapped pay per affected employee, up from 90 days, according to Withers. If you were part of a group redundancy and weren't properly consulted, this is worth raising with Acas or an employment solicitor.

Checklist: working out your redundancy payout

• Confirm your continuous length of service with your employer — check your contract start date, not just your current role's start date.
• Work out your age band for each year worked, since the multiplier changes at 22 and 41.
• Check your gross weekly pay against the current cap of £751 — if you earn more than this, your statutory payment is still based on the capped figure.
• Ask whether your employer is offering only the statutory minimum or an enhanced contractual package.
• Confirm which portion of any payout falls above the £30,000 tax-free threshold.
• If 20+ colleagues are affected at your workplace, ask whether a formal collective consultation process took place — if not, get advice on the protective award.
• Use the gov.uk redundancy pay calculator to get an exact figure for your situation.

How other countries compare

Statutory redundancy schemes vary widely. In Australia, entitlements scale from 4 weeks' pay after one year of service up to 12 weeks after 9+ years, uncapped by age. The United States has no federal statutory redundancy pay requirement at all — severance is generally down to employer policy or contract. Several EU states, including Germany, use a formula based on final salary and years of service similar in spirit to the UK's approach, per the European Commission.

Key Numbers

• £751: new statutory weekly pay cap from 6 April 2026
• £22,530: maximum statutory redundancy payment
• £30,000: tax-free threshold on redundancy payments
• 180 days: new maximum protective award for failure to consult, up from 90

Sources

• gov.uk: Redundancy pay
• CIPP: Statutory redundancy rates announced for 2026/27
• Withers: UK employment rights changes from April 2026
• Acas: Your rights during redundancy

Educational content only — not financial advice.