Statutory redundancy pay under the Employment Rights Act 1996 uses age, service, and weekly pay (capped at £700 in 2025). The age multiplier is as follows: 1.5 weeks per year for ages 41+, 1 week for 22–40, and 0.5 for under 22. Maximum service is capped at 20 years.
For example, an employee aged 43 with 10 years service, whose rate of gross pay was £350 per week, will receive: 1.5 x 10 x £350 = £5,250.
Check contracts for enhanced terms, which some offer. Accurate calculations avoid disputes during layoffs, and HR tools can simplify this for long-serving staff. Use an online calculator to double-check your math and ensure fairness. Explaining the payout to staff clearly can soften the blow and maintain goodwill.
Helpful government guidance is available at: Calculate your statutory redundancy pay on GOV.UK.