Statutory Redundancy Pay 2026/27: New Weekly Cap and How to Calculate Your Entitlement
Updated April 2026: the weekly pay cap increased from £643 to £751.
If you are facing redundancy, one of the first questions is: how much statutory redundancy pay am I owed? The answer depends on your age, your length of service, and your weekly pay — but there are caps that limit the amount even for high earners. Here is everything you need to know for 2026/27.
What changed in April 2026?
HMRC uprates statutory redundancy pay limits each April in line with the retail price index (RPI). From 6 April 2026, the weekly pay cap increased from £643 to £751. This is the maximum weekly pay figure used in the calculation regardless of your actual earnings.
The maximum statutory redundancy payment also increased from £19,290 to £22,530.
The statutory redundancy pay formula
Statutory redundancy pay is calculated using three factors:
- Your age during each year of service
- Your length of continuous service (capped at 20 years)
- Your weekly gross pay (capped at £751 for 2026/27)
The age-band multipliers that apply to each year of service are:
- Under 22: half a week's pay per year of service
- Age 22 to 40: one week's pay per year of service
- Age 41 and over: one and a half weeks' pay per year of service
The multiplier is applied to the age you were during each year of service, not just your current age. This matters if your service spans an age boundary.
A worked example
Suppose you are 45 years old, have 12 years of continuous service, and earn £900 per week gross (£751 cap applies). Your service broke down as follows:
- Years worked aged 33–40 (8 years): 8 × 1 week = 8 weeks' pay
- Years worked aged 41–45 (4 years, rounded down): 4 × 1.5 weeks = 6 weeks' pay
Total: 14 weeks × £751 = £10,514 statutory redundancy pay.
Maximum statutory redundancy pay in 2026/27
The maximum payout is achieved by someone who:
- Is aged 61 or over
- Has 20 or more years of continuous service
- Earns at or above the £751 weekly cap
Maximum weeks: 20 years × 1.5 = 30 weeks.
Maximum payout: 30 × £751 = £22,530.
Is statutory redundancy pay tax-free?
Yes — the first £30,000 of any redundancy payment (statutory or enhanced) is free from income tax and national insurance. Statutory redundancy pay never reaches £30,000, so it is always entirely tax-free. Any amount above £30,000 from an enhanced package is taxable as earnings.
What qualifies for statutory redundancy pay?
To qualify, you must:
- Be an employee (not self-employed or a worker)
- Have at least 2 years of continuous service with the same employer
- Have been made genuinely redundant (not dismissed for misconduct or resigned)
Some categories of worker are excluded, including certain share fishermen, Crown servants, and those on fixed-term contracts who have signed away their redundancy rights. If you are in any doubt about your eligibility, consult ACAS or a solicitor.
Enhanced redundancy pay
Statutory redundancy pay is the legal minimum. Many employers offer enhanced packages — common arrangements include paying 1.5× or 2× statutory, removing the weekly pay cap, or using actual weekly pay rather than the capped figure.
Your entitlement to enhanced pay depends on your employment contract, a collective bargaining agreement, or an enhanced scheme your employer has offered in writing. Verbal promises of enhanced pay can be difficult to enforce.
If your employer cannot pay
If your employer is insolvent, you can claim statutory redundancy pay from the government's Redundancy Payments Service. You will need to make a claim via the government website, and the same weekly cap and age-band rules apply.
Use our redundancy pay calculator to get your exact statutory entitlement in seconds based on your age, service length, and weekly pay.