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Facts about redundancy pay

You have the right to a redundancy payment if you're an employee who has worked continuously for your employer for at least two years. Statutory redundancy pay isn't taxable.

Redundancy pay is also due when a fixed-term contract of two years or more expires and is not renewed because of redundancy.

• More on fixed-term work
• Guidance on whether you're an employee

Alternative work

A redundancy payment isn't due to you if work picks up and your employer offers to keep you on, or offers you suitable alternative work which you refuse without good reason. If you leave your job for a new one before the end of your notice period, your payment might also be affected.

• More about alternative work

Temporary lay off

Redundancy pay can be claimed from your employer if you have been temporarily laid off for more than four weeks in a row (or six weeks in a 13 week period).

• More about temporary lay off

Notice pay

As well as a redundancy payment, your employer should give you proper notice of termination of employment (or pay in lieu of notice). Details of the notice period will be in your contract.

• More about notice and notice pay

Calculating pay

There may be an arrangement in your contract for how redundancy pay will be worked out. However, if this gives you less than the statutory pay, the statutory amount applies. The first £30,000 of any termination payment is tax-free. More information on whether elements of the payment such as pay in lieu of notice (PILON) is taxable is available from HM Revenue and Customs.

• HM Revenue and Customs (HMRC)

Statutory redundancy pay

The interactive calculator can tell you how much statutory redundancy pay you might be entitled to.

• Calculate your redundancy pay

The total amount you should be paid for redundancy will be based on: 

You’ll get:

If you were made redundant before 1 October 2006:

What to do if you have problems

If you've been made redundant, your employer will normally pay you either on the last day of your notice period or shortly afterwards, or on your next pay day.

If you haven't been paid, or if you've been paid but are unhappy with the amount, you should try to sort the problem out directly with your employer first. Write to your employer explaining the problem and asking for full payment. Your employer should give you a written statement showing how any payment has been calculated.

If this doesn't work, you can apply to an Employment Tribunal. You need to make a claim within six months, otherwise you might lose the right to a payment.

• More about resolving problems at work

If your employer can't pay

If they can't pay because they're insolvent, you might be able to get the money from the Government.

• More about insolvency

Where to get help

The Advisory, Conciliation and Arbitration Service (Acas) offers free, confidential and impartial advice on all employment rights issues. You can call the Acas helpline on 08457 47 47 47 from 8.00 am to 6.00 pm Monday to Friday.

• Acas Opens new window

The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland. You can contact the LRA on 028 9032 1442 from 9.00 am to 5.00 pm Monday to Friday.

• Labour Relations Agency Opens new window

Your local Citizens Advice Bureau (CAB) can provide free and impartial advice. You can find your local CAB office in the phone book or online.

• Find your local Citizens Advice Bureau Opens new window

If you have doubts about the way your employer may have calculated your statutory redundancy pay you can call the Redundancy Payments Helpline on 0845 1450 004.

More useful links

• Detailed guidance on redundancy entitlement from the Department for Business, Enterprise and Regulatory Reform (BERR) Opens new window
• Detailed guidance on redundancy from the Department for Employment and Learning Northern Ireland Opens new window
• Insolvency - find out more Opens new window
• Advice for employers on redundancy from Business Link Opens new window
• Advice for employers in Northern Ireland on redundancy from nibusinessinfo Opens new window