Statutory Redundancy Calculator 2026/27

Your rights during redundancy

Being placed "at risk" of redundancy triggers a set of legally protected rights. Your employer must follow a fair process — failing to do so can lead to an unfair dismissal claim even if the redundancy itself is genuine.

Key rights during the process:

• Consultation: You must be individually consulted in a meaningful way. This is not a tick-box exercise — you have the right to propose alternatives to redundancy and have them genuinely considered.
• Selection criteria: If your role is being selected from a pool, the criteria must be objective, fair, and consistently applied. Using subjective criteria like "attitude" without evidence is legally risky for employers.
• Alternative roles: Your employer must consider whether a suitable alternative vacancy exists within the organisation. If you are offered a suitable role and unreasonably refuse it, you may lose your statutory redundancy pay entitlement.
• Notice period: You are entitled to your contractual notice or the statutory minimum (one week per year of service, up to 12 weeks), whichever is higher.
• Reasonable time off: During your notice period, you have the right to take paid time off to look for a new job (up to 40% of a week's pay).

Redundancy vs dismissal — the legal difference

Redundancy and dismissal are two distinct legal concepts. Getting them confused can be costly — either for employees who accept less than they're owed, or for employers who misclassify a dismissal as redundancy.

Redundancy occurs when a role itself is no longer needed — because the business is closing, relocating, or reorganising. The person being made redundant has not done anything wrong; their position simply no longer exists.

Dismissal covers all other terminations of employment: capability, conduct, or some other substantial reason (SOSR). Dismissal does not attract redundancy pay and follows different procedural requirements.

The 90-day rule — collective redundancy

When an employer proposes to make 20 or more employees redundant within any 90-day period, collective consultation rules apply. These are significantly more demanding than individual redundancy rules.

• The employer must notify the government via HR1 form before redundancies begin.
• Minimum consultation period: 30 days (20–99 redundancies) or 45 days (100+ redundancies).
• Consultation must be with elected employee representatives or a recognised trade union — not just individual employees.
• Failure to comply can result in a Protective Award of up to 90 days' gross pay per affected employee, ordered by an Employment Tribunal.

What to do immediately when made redundant — 5-step action guide

1. Get everything in writing. Request the redundancy in writing immediately. This should confirm your notice period, your final pay date, your redundancy payment, and any accrued holiday pay. Do not rely on verbal assurances.
2. Check your contract for enhanced pay. Many employers offer contractual redundancy that is more generous than the statutory minimum. Check your contract, staff handbook, and any collective agreements with trade unions. If your employer is offering you less than your contract specifies, you can pursue the difference.
3. Claim all holiday pay owed. You are legally entitled to be paid for all accrued but untaken annual leave up to your last day of employment. This is taxable income (unlike the redundancy payment itself).
4. Register for Universal Credit or Jobseeker's Allowance. Do not delay — benefits claims cannot be backdated. You can claim from the day after your last day of employment, even if you receive a redundancy payout (though large payouts can delay the start of means-tested benefits).
5. Check your P45. Your employer must issue a P45 showing your total pay and tax deducted in the current tax year. You will need this for your next employer or for a Universal Credit claim. Check it is accurate — errors in your cumulative tax code can result in an unexpected tax bill.

Tax on redundancy payments

Statutory redundancy pay is completely tax-free up to £30,000. This exemption covers the redundancy compensation element only. Other final payments are taxed normally:

• Your final salary: fully taxable at your normal rate.
• Holiday pay: fully taxable — it is treated as earned income.
• Payment in Lieu of Notice (PILON): taxable since April 2018. It used to be possible to receive PILON tax-free; this loophole was closed.
• Enhanced redundancy pay above £30,000: taxable, subject to income tax (but not NI).