Redundancy pay

Redundancy pay varies from country to country depending upon different government facilities and legislation. On this page we will give a brief summary of redundancy rights in the UK, however most national governments will have a dedicated web site to explain redundancy rights in your country.

Redundancy rights in the UK

Many people hold the view that everyone who has worked at a firm is entitled to redundancy pay. This is not true. There are a number of statutory regulations that set out the requirements for redundancy pay.

Fundamentally if you have worked continuously for an employer for two years then you will be entitled to redundancy pay. The level of this redundancy pay will depend upon you years of employment and your age. However, statutory redundancy pay isn't a great deal of money.

For those years worked when the employee was under 22 they are paid 0.5 weeks pay for each year they worked at the firm. For years worked between he ages of 22 and 41 they are paid 1.0 weeks pay for each year and for years worked over the age of 41 and more it is 1.5 weeks pay for each year of service. It should also be noted that the maximum weeks pay you can receive (before tax) is £330.

Calculate the redundancy pay you are due.

Some companies will elect to pay a more generous redundancy package to reward you for your time at the company and perhaps as a way of maintaining moral at the firm, however they are not obliged to do this.

It should also be noted that redundancy pay is tax free up to the amount of £30,000. Anything after £30,000 is tax at the highest tax rate you face.