Redundancy cost calculator for employers (2026/27)
The government calculator shows the statutory minimum. This one shows what a redundancy actually costs you: statutory pay, notice and the accrued holiday you'll pay out.
The redundancy
2026/27: a week's pay for statutory redundancy is capped at £751 and the statutory maximum is £22,530 (20 years' service cap). Multipliers: half a week per full year under 22, one week for 22-40, one and a half for 41+. Notice and holiday are paid at actual (uncapped) pay. Statutory redundancy pay is tax-free; notice and holiday pay are taxed as normal.
A redundancy usually costs two to three times the statutory redundancy figure once notice and accrued holiday are counted. Statutory redundancy pay is capped (£751 a week, £22,530 maximum in 2026/27) - but notice pay and holiday are paid at the person's real salary, uncapped.
How is statutory redundancy pay calculated?
Only employees with 2+ years' service qualify. For each full year (up to 20), they get a multiple of a week's pay - capped at £751 - based on their age during that year (gov.uk):
| Age during the year | Weeks of pay per year |
|---|---|
| Under 22 | 0.5 |
| 22 - 40 | 1 |
| 41 and over | 1.5 |
What else does a redundancy cost the employer?
- Notice - at least the statutory ladder (one week per year, capped at 12; see the notice pay calculator), at full pay whether worked or paid in lieu. Contractual notice can be longer.
- Accrued holiday - untaken statutory leave must be paid in the final pay at the normal daily rate.
- Consultation time - individual consultation always; collective rules with minimum periods apply from 20+ proposed redundancies at one establishment.
- Enhancement - any company redundancy scheme on top is your policy's cost.
Is redundancy pay tax-free?
Statutory redundancy pay (and any enhancement) is tax-free up to £30,000 in total. Notice pay - worked or in lieu - and holiday pay are earnings, taxed and NI'd as normal.
A fair process still matters
Redundancy is a potentially fair dismissal reason, but selection and consultation must be genuine and documented - the redundancy process guide walks through the pool, the criteria that stand up, and the 20-plus threshold where collective consultation and form HR1 kick in. From January 2027 anyone with six months' service can bring an unfair dismissal claim, so the paperwork bar rises: see the 6-month rule explained. Every rate used here is on the 2026/27 statutory rates table.
This calculator applies the statutory rules as published and shows its working, but it cannot know your contracts, your policies or anything unusual about the case. Treat the figure as a starting point, and take advice on anything contested or expensive.
The paperwork that protects you
CoDash keeps service dates, salaries, leave balances and the consultation trail in one place - so when hard decisions happen, the numbers and the process are already right.