LRD guides and handbook October 2013

Redundancy law - a guide to using the law for union reps

Chapter 7

Calculating entitlement

Statutory redundancy pay is calculated using a statutory formula based on the employee’s age and length of employment, multiplied by a “week’s pay”. The formula entitles employees dismissed through redundancy to:

• half a week’s pay for each year aged up to 21;

• a week’s pay for each year aged 22 to 40; and

• a week-and-a-half’s pay for each year aged 41 or over.

The maximum number of years of employment that can be taken into account is 20.

There is an online “ready reckoner” for calculating redundancy pay at: www.gov.uk/calculate-your-redundancy-pay.