Your redundancy pay will depend on your annual salary (before tax) and the number of years you’ve worked at the company. If you have been working for the company for at least two years, then for each full year you have been working, the company owes you:
||Half a week’s pay
|22 – 40
||One week’s pay
||One and a half week’s pay
Statutory redundancy pay comes with terms and conditions, which include:
- Whilst working, if you turned 22 or 41, the higher rates will only apply for the full years you were aged over 22 or 41.
- The maximum weekly amount of redundancy pay you can get is capped at £544, regardless of whether you earn more.
- You can only get redundancy pay for a maximum of 20 years’ work. For example, if you’ve had your job for 28 years, you’ll only get 20 years worth of pay.
Chris (aged 25) has worked at an accountancy firm for five years, earning £400 a week. Unfortunately, Chris has just been made redundant, and his pay is as follows:
- Half a week’s pay from when he was under the age of 22 = £400
- Three week’s pay for the three years he worked over the age of 22 = £1,200
Overall, Chris will receive a statutory payment of £1,600. However, this payment is excluding any contractual pay.