Step 1: Check if you’re entitled to redundancy pay
As a minimum, all employees who have been working for their employer for at least two years are entitled to statutory redundancy pay.
But some employers offer more generous redundancy packages. Check your employment contract to see if this applies to you.
How much is statutory redundancy pay?
The amount you get depends on your age, your pay and how long you’ve been working for your employer. You can find out how much you’ll get using the government’s redundancy pay calculator.
- half a week’s pay for each full year you were under 22
- one week’s pay for each full year you were 22 or older, but under 41
- one and half week’s pay for each full year you were aged 41 or older
Your weekly pay is capped at £538 (£560 in Northern Ireland) and your length of service is capped at 20 years which means the maximum statutory redundancy pay you can currently get is £16,140 (£16,800 in Northern Ireland).
If you’re made redundant after 31 July 2020 (14 August 2020 in Northern Ireland), your statutory redundancy pay must be based on your full salary, not the amount you are being paid if you are on furlough.
You can receive up to £30,000 in redundancy pay free of tax and National Insurance.
What about notice?
Your employer must give you a minimum amount of notice too. This is called statutory redundancy notice.
You get one week’s notice if you’ve been employed between one month and two years. If you’ve worked for your employer for two years or more, you get a week’s notice for each year up to a maximum of 12 weeks.
Again, your employer can give you more than this so check your contract to see what it says.
Your employer must pay you during your notice period regardless of whether you work it or not. And, for anyone made redundant after 31 July 2020 (14 August 2020 in Northern Ireland) your statutory notice pay must be based on your full salary not your furloughed salary. If your employer offers a longer notice period, they can base that on a lower rate of pay as long as the notice period is at least one week longer than the statutory minimum.
Your notice pay is taxed as pay in the normal way.
What about holiday pay?
You should also be paid for any outstanding annual leave you have and this should be paid at your full rate (not your furlough rate). You still build up holiday entitlement during furlough leave.
Any holiday pay you get is taxed in the usual way.
What if my employer has gone bust?
If your employer is unable to pay your redundancy pay because they have become insolvent, you can claim the money you are owed from the government using the links below.
Make a claim for redundancy pay, holiday pay and any unpaid wages or commission
Make a claim for loss of notice pay
If you live in Northern Ireland, the situation is different. Find out about your rights in Northern Ireland if your employer is insolvent.