Redundancy & Final Pay Calculator 2026/27
Being made redundant involves multiple pay elements with different tax treatments. Calculate your total final pay, understand what's tax-free, and know your rights before you sign anything.
Your Details
Final Pay Elements
Enter weeks of notice you are being paid for but not working (PILON).
Any extra compensation offered on top of statutory redundancy.
Estimated Net Final Pay
£5,592.00
After estimated 28% tax & NI on the taxable portions.
What's included in your final redundancy pay
A redundancy final pay package is made up of multiple components — each with its own tax and NI treatment. Understanding the difference can save you from unexpected tax bills:
| Component | Income Tax | National Insurance | Notes |
|---|---|---|---|
| Outstanding salary | Fully taxable | Yes | Pay from last payslip to last day of employment |
| Accrued holiday pay | Fully taxable | Yes | All untaken statutory leave must be paid out |
| Notice pay (worked) | Fully taxable | Yes | You work your notice and receive normal pay |
| PILON (Payment in Lieu of Notice) | Fully taxable | Yes | All PILON is taxable since April 2018 |
| Statutory redundancy pay | Tax-free up to £30k | No | Capped at £22,500 (20 × £750 × 1.5) |
| Enhanced / ex-gratia payment | Tax-free up to £30k (combined) | No | £30k limit shared with statutory redundancy |
The £30,000 tax-free redundancy threshold — how it works
The £30,000 tax exemption applies to the total of your statutory redundancy pay and any enhanced or ex-gratia payment from your employer. The threshold covers both together — it's not £30,000 each.
Example: If you receive £8,000 statutory redundancy pay and a £28,000 settlement payment, your total qualifying payment is £36,000. The first £30,000 is tax-free. You pay income tax on the remaining £6,000 at your marginal rate (20%, 40%, or 45%).
£30,000
Tax-free threshold
for genuine redundancy payments
£750/wk
Weekly pay cap (2026/27)
for statutory redundancy calculation
£22,500
Max statutory redundancy
20 years × 1.5 weeks × £750
PILON — Payment in Lieu of Notice tax treatment
PILON means your employer pays you instead of asking you to work your notice period. Since April 2018, all PILON is fully taxable — income tax and National Insurance apply regardless of whether your contract included a PILON clause.
HMRC introduced the Post-Employment Notice Pay (PENP) rules to prevent people from sheltering notice pay inside the £30,000 tax-free threshold. Your employer must calculate your PENP and deduct tax and NI through payroll. If you work your notice period normally, the pay is taxed as earnings. If you receive PILON, the same applies.
Common mistake to avoid
Some settlement agreements still claim that PILON can be packaged as a tax-free ex-gratia payment. This is wrong under post-2018 rules and HMRC will challenge it. Always take independent legal advice before signing a settlement agreement.
Your P45 and tax after redundancy
Your employer must give you a P45 when you leave. This document shows your total pay and tax deducted in the tax year to date. Keep it safe — you'll need it to:
Start a new job
Give your P45 to your new employer so they apply the correct tax code immediately and you don't end up on emergency tax.
Claim a tax refund
If you don't work for the rest of the tax year after redundancy, you've likely overpaid tax. Use your P45 figures to claim a refund from HMRC via your Personal Tax Account.
File Self Assessment
If your redundancy package was large or complex, you may need to file a Self Assessment return. Your P45 provides the necessary income figures.
Overpaid tax after redundancy? If your final payslip includes large taxable amounts (PILON, holiday pay, salary) that pushed your PAYE up, and you don't work again until April 6th, HMRC will reconcile after year-end and send a P800 refund. Read our tax refund guide for the fastest way to claim.