How is statutory redundancy calculated?

The UK formula

Statutory Redundancy Pay = sum over years of service of:

• 0.5 × weekly_pay for each year under age 22
• 1.0 × weekly_pay for each year aged 22 to 40
• 1.5 × weekly_pay for each year aged 41+

Where:

• weekly_pay is capped at the statutory cap (£700/wk FY26-27 — updated annually)
• years of service is capped at 20
• Eligibility requires 2+ years continuous service

Example

Employee aged 45, 10 years of service, weekly pay £600 (under cap):

• Years aged 41-45 (5 years) × 1.5 × £600 = £4,500
• Years aged 31-40 (10-5=5 years before age 41) × 1.0 × £600 = £3,000
• Total: £7,500

Where it shows

Automatically calculated and shown on the Offboarding tab when:

• Reason = redundancy
• Continuous service ≥ 2 years

The calculator reads the employee's DOB and contract start to work out per-year age multipliers.

Tax treatment

Statutory redundancy is tax-free up to £30,000 in the UK. Anything above (e.g. enhanced redundancy or pay-in-lieu-of-notice) is taxable. The engine currently handles statutory portion only — enhanced redundancy goes in as a separate payroll line.