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Sick pay from day one — the April 2026 SSP rule change explained
4 min read
If you're facing redundancy in 2026, knowing your rights is critical. Statutory Redundancy Pay (SRP) rules have been updated, and the weekly pay cap has risen. Here's everything you need to know.
How Statutory Redundancy Pay Is Calculated
SRP depends on your age, years of service, and weekly pay (subject to a cap). For each year of employment:
- Aged 22 or under: 0.5 weeks' pay per year
- Aged 22–40: 1 week's pay per year
- Aged 41+: 1.5 weeks' pay per year
Maximum is 20 years of service. The weekly pay is capped at £700/week from April 2026. Maximum SRP: 20 × 1.5 × £700 = £21,000.
The £30,000 Tax-Free Rule
The first £30,000 of any genuine redundancy payment — whether statutory or enhanced — is completely free of income tax and National Insurance. Only the amount above £30,000 is taxable.
If your employer pays enhanced redundancy of £35,000: you receive the full £30,000 tax-free, and pay 20% (or 40%) income tax on the remaining £5,000.
What Counts as Redundancy Pay vs Other Pay?
The £30,000 exemption applies specifically to genuine redundancy compensation. The following elements do NOT count toward the exemption and are always taxed:
- Pay in lieu of notice (PILON)
- Holiday pay owed
- Bonuses or commission earned before redundancy
- Garden leave payments
Frequently Asked Questions
Can I be made redundant while on maternity leave?
You cannot be selected for redundancy because you are on maternity leave — that is automatically unfair dismissal. However, if the role itself is genuinely redundant and all staff in similar roles are being made redundant, the process must follow specific rules, including offering you suitable alternative employment before others.
How do I check if my redundancy pay is correct?
Use our Redundancy Pay Calculator to enter your age, service, and weekly pay to get the statutory minimum. If your employer is offering less than this, contact ACAS immediately.