Statutory Pay
Redundancy & Final Pay Calculator
Leaving your job? Calculate your total final pay including statutory redundancy, notice pay (PILON), holiday pay, and settlement agreements.
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 makes up your final pay?
When you are made redundant or leave your job under a settlement agreement, your final pay is usually made up of four distinct parts. Some of these are tax-free, and some are fully taxable.
1. Statutory Redundancy Pay (Tax-Free)
If you've worked for your employer for 2 years or more, you are legally entitled to statutory redundancy pay. It is calculated based on your age, weekly pay, and years of service. This amount is completely tax-free. Note that for the 2026/27 tax year, weekly pay used in this calculation is capped (currently £750), and years of service is capped at 20.
2. Notice Pay or PILON (Taxable)
If your employer tells you that you don't need to work your notice period but they will still pay you for it, this is called Payment in Lieu of Notice (PILON). Since April 2018, all PILON payments are subject to Income Tax and National Insurance, just like your regular salary.
3. Holiday Pay (Taxable)
You must be paid for any holiday you have built up (accrued) but not taken by the time you leave. This is also taxed as normal income.
4. Settlement Agreement / Ex-Gratia (First £30k Tax-Free)
Often, employers offer an enhanced redundancy payout or a settlement agreement (an "ex-gratia" payment) to prevent you from taking them to an employment tribunal.
Under current rules, the first £30,000 of compensation for loss of employment is tax-free. However, this £30,000 limit includes your statutory redundancy pay. So if you receive £10,000 in statutory redundancy and a £25,000 settlement, your total compensation is £35,000. £30,000 will be tax-free, and you will pay tax on the remaining £5,000.
Will this affect my tax code?
If you receive a large taxable payout in your final payslip, the PAYE system might temporarily assume you are earning that amount every month. This can result in you overpaying tax or being put on an emergency tax code.
If you don't start a new job in the same tax year, you can claim a tax refund from HMRC for the overpaid amount. Make sure to keep your P45 safe, as you will need the figures on it to prove how much you were paid.