Check how much redundancy pay you can get
If you’re being made redundant, you might be entitled to redundancy pay.
You’ll only get redundancy pay if it is a genuine redundancy - check if your redundancy is fair.
Most people who are made redundant are dismissed because of a genuine redundancy reason.
If you think the dismissal is unfair or discriminatory, you should investigate whether it’s an unfair dismissal - your client may be able to claim both redundancy pay and compensation for unfair dismissal or discrimination.
There are 2 types of redundancy pay you could get:
‘statutory’ redundancy pay - what the law says you’re entitled to
‘contractual’ redundancy pay - extra money your contract says you can get on top of the statutory amount
If you're entitled to either type of redundancy pay, it'll be paid by your employer.
Who can get statutory redundancy pay
You’ll get statutory redundancy pay if you:
have worked for your employer for 2 years continuously
have lost your job because there was a genuine need to make redundancies in your workplace
are a particular kind of worker called an ‘employee’ - this includes part-time employees
Read more about who is classed as an employee on GOV.UK.
If you’re on a fixed-term contract
You will be entitled to statutory redundancy pay if your employer doesn’t renew your fixed-term contract because the job doesn’t exist any more and you had either:
a fixed-term contract for 2 years or more
shorter contracts that followed on from each other and added up to 2 years or more
Who won’t get statutory redundancy pay
You won’t get statutory redundancy pay if you:
have worked in your job less than 2 years
are a police officer or in the armed forces
are a Crown servant, parliamentary staff or holder of public office (for example, a Justice of the Peace)
are a share fisherperson
are domestic staff working for your immediate family
are an employee of a foreign government
Even if you can’t get statutory redundancy pay, you might be able to get contractual redundancy pay. Make sure you check your contract to see what it says about redundancy pay.
When you could lose your right to statutory redundancy pay
Even if you’re entitled to statutory redundancy pay, you could lose your right to it if you:
turn down a suitable alternative job your employer offered you without a good reason
want to leave before the job is due to end - for example, because you’ve found another job
are fired for gross misconduct before your job finishes
Read more about being offered an alternative job.
How much statutory redundancy pay you can get
You can see how much redundancy pay you'd get using the redundancy pay calculator on GOV.UK.
Redundancy pay is based on your earnings before tax (called gross pay).
For each full year you've worked for your employer, you get:
- age 18 to 22 - half a week's pay
- age 22 to 40 - 1 week's pay
- age 41 and older - 1.5 weeks' pay
If you turned 22 or 41 while working for your employer, the higher rates only apply for the full years you were over 22 or 41.
You won't pay any tax on your statutory redundancy pay.
There are some limits to how much money you’ll get:
the maximum weekly amount you can get is £500 - even if you earn more per week
you can only get redundancy pay for a maximum of 20 years’ work (for example, if you’ve worked at your job for 23 years, you’ll only get redundancy pay for 20 years)
Check how long you’ve worked for your employer
The time you've worked for your employer is called your length of service. Work this out by counting the number of full years you've worked for your employer. Your length of service should start on your first day at work and finish on the day your employment ends.
You might be unsure what your length of service is if:
- you weren't given the statutory notice period you were entitled to
- you were given pay in lieu of notice
In these situations you can work out your length of service by adding on the amount of statutory notice you should have had. For example, if you were entitled to 4 weeks' statutory notice but your employer only gave 2 weeks, add another 2 weeks to get your end date. You can't add any extra notice your contract says you're entitled to.
Adding the statutory notice period your client should have had to their length of service doesn't change the date of termination for the purpose of time limits for going to a tribunal. The time limit still runs from the day your client was actually dismissed.
Common issues with statutory redundancy pay
You’re getting sick pay
Don’t worry if you’re getting sick pay that’s less than your usual pay when you’re made redundant. Your redundancy pay will be based on your usual pay from before you were off sick.
You're on maternity leave
If you’re made redundant while you’re on maternity leave, your redundancy pay will be based on your normal pay. It doesn’t matter if you’re earning less than usual at the time you’re made redundant.
Your hours change each week
If your contract doesn’t set out your ‘normal hours of work’ (how many hours each week you need to work), your weekly pay will be worked out as an average.
The average will be based on what you earned in the 12 weeks before you were told you’d be made redundant. This includes any commission you made in that time.
People on zero-hours contracts might be entitled to redundancy pay - but it can be very complicated to work out, so contact your nearest Citizens Advice for help.
You work overtime
Your overtime won’t usually be included in your weekly pay, unless it was regular and you had to do it as part of your job.
Contact your nearest Citizens Advice for help working out what should be included in your redundancy pay.
You’re paid commission
If your contract doesn’t set out your normal work hours
If your contract doesn’t set out your normal work hours, your commission will be included.
If your contract does set out your normal work hours
If your contract does set your normal work hours, whether your commission is included depends on how you earn it:
commission is included if it’s based on how much work you do - for example, if it’s based on how many phone calls you make
commission isn’t included if it’s based on the success of your work - for example, if it’s based on how much of something you sell
How redundancy pay is worked out when commission is included
When commission is included, it’s based on an average of the amount you made in the 12 weeks before you were told you’d be made redundant.
The rules about when commission is included redundancy pay are complicated - contact your nearest Citizens Advice for help with this.
If you’ve agreed a temporary drop in wages
If you’ve agreed to take a drop in pay because the business you work for is struggling, your redundancy pay could be affected. It depends whether you agreed to change your contract or not.
This can be difficult to work out so contact your nearest Citizens Advice for help.
If you've been laid off or put on short-time working
If you’ve been laid off or put on short-time working, and then made redundant, your redundancy pay will be based on your usual weekly pay when you did your normal hours.
The only time this won’t apply is if you agreed to a permanent change in the number of hours you work.
If your company’s been taken over
If the company you work for has been taken over through a transfer of undertaking (TUPE), working out redundancy pay can be complicated.
Contact your nearest Citizens Advice to discuss your options.
Check if you can get contractual redundancy pay
Your employer might pay you extra money on top of the statutory amount you’re entitled to - this is called contractual redundancy pay. Make sure you check your contract to see what it says.
If you haven’t been given a contract or it’s not in there, ask your employer or check your staff handbook or intranet.
Your employer should tell you how any contractual redundancy pay is calculated and when you’ll get your payment.
By law, your employer’s contractual redundancy pay can’t be less than the statutory amount.
Paying tax on contractual redundancy pay
You’ll have to pay tax on a redundancy payment if it’s more than £30,000. Your employer will deduct any tax for you.
Working out the tax on your redundancy pay can be complicated so contact your nearest Citizens Advice if you need help.
Getting advice about contractual redundancy pay
If you’re a member of a union, speak to your union rep first - they should have been involved in the redundancy negotiations.
If there isn’t a union at your work, you might have an employee representative to help you understand the redundancy agreement.
If you don’t have any representatives at work, contact your nearest Citizens Advice. Ask your employer for a copy of your redundancy agreement for an adviser to look at.
Getting your redundancy pay
Your employer should pay you your redundancy pay on the date you leave work, or an agreed date soon after.
They’ll pay you in the same way they paid your wages, for example into your bank account.
You should also get a written statement saying how your payment was calculated.
If you don’t get your redundancy pay
Your employer should pay your redundancy pay in the same way they paid your wages. If they don’t, you can take steps to get your pay.
If you need more help at any stage, contact your nearest Citizens Advice.
Take the following steps:
Step 1: write your former employer a letter
Tell them what you’re entitled to and include any evidence you have to back up your argument.
Step 2: take your employer to a tribunal
If you don’t get your payment after sending your letter, you need to lodge a claim with the Industrial Tribunal.
When you put in a claim to a tribunal, a Conciliation Officer from the Labour Relations Agency (LRA) will contact you to see if you want their help to try and settle your claim.
They'll see if your employer will agree to a process called ‘conciliation' - a way to resolve disputes without going to a tribunal.
If you can’t settle with your employer, your deadline for claiming any redundancy pay you’re owed is 6 months minus a day from the last day you were employed. If you’re also claiming for unfair dismissal or discrimination, then you have 3 months less a day.
Your last resort is to take your employer to a tribunal. Going to a tribunal can be expensive and stressful, so it’s a good idea to get advice from your local Citizens Advice before you go ahead.
Your employer has gone out of business (is insolvent)
If your employer has gone out of business and you haven’t been paid your redundancy, you need to submit a claim to either:
the Redundancy Payments Service
the Office of the Industrial Tribunals and Fair Employment Tribunal
If there’s an administrator or liquidator, they should give you form RP1. You also request one from them at their registered office.
If you don't know who the liquidator is, you can call the Redundancy Payments Service Helpline on 0800 585 811.
If your employer has stopped trading but isn’t insolvent, write to your employer claiming your statutory redundancy pay. If your employer doesn't make the payment, you can make a claim to an employment tribunal.
Where you’re unsure of your employer’s trading status you may wish to submit both claim forms.