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How much statutory redundancy pay must a UK employer pay?
Section 162 of the Employment Rights Act 1996 sets redundancy pay per year of employment, counted backwards from the end of the period: one and a half weeks' pay for each year in which the employee was 41 or over, one week's pay for each year from age 22, and half a week's pay for each earlier year. Only the most recent twenty years count.
How each year is counted
- Years aged 41 or over. One and a half weeks' pay for each of those years.
- Years from age 22. One week's pay for each of those years.
- Earlier years. Half a week's pay for each year before age 22.
Section 162 counts the years backwards from the end of the period of employment, and only the most recent twenty years count.
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Related questions
- Is there a limit on how many years count?
- Yes. Section 162(3) provides that once twenty years of employment have been reckoned, no account is taken of any year earlier than those twenty.
- Why does age change the amount?
- Section 162(2) sets the entitlement in three age bands: one and a half weeks' pay for a year in which the employee was not below 41, one week for a year not below 22, and half a week for each remaining year.
What this answer does not cover
- A week's pay is itself a defined and periodically reviewed figure with a statutory cap. This page does not state the current cap.
- Whether a dismissal counts as redundancy in the first place is a separate question.