How to calculate your statutory redundancy pay
Being made redundant is an awful time for anyone but what can make the time even worse is not knowing how much money you’re entitled to in regards to your redundancy payout. This blog will simply break down how the national statutory redundancy pay rates work and how you can calculate what you will be entitled to as a minimum payout by law.
Please note this is the national rate so it’s the absolute minimum your work can legally pay you. Depending on your workplace they may offer a larger payout, however if they attempt to pay you less than these minimum rates then you should immediately gain help from the Citizens Advice Bureau or your Workplace Union if you belong to one.
Minimum Employment Period
Firstly, these rates only apply if you have been an employee of your workplace for over 2 years. Unfortunately if you have worked there less than two years then you are not legally entitled to redundancy pay.
Statutory Redundancy Rates
Here are the national statutory redundancy rates, they are based upon your age whilst in employment.
Under 22 Years of Age
Half a week’s pay for every year you worked
Aged 22 Years and Under 41 Years
One week’s pay for ever year you worked..
Aged 41 Years Old and Over
One and a half week’s pay for every year you worked.
It is worth noting that if your age went over one of the rates whilst you were working there then the rate changes accordingly. For example if you started working at 21 years old and were made redundant at 25 years old then you would only gain rate 1 for the one year you were 21 years old then rate 2 for the years you were aged 22 and over.
Limits and Cut-Off Points
There are two pieces of additional information you must note in regards to ‘caps’ (limits) set by the government on redundancy pay:
- Weekly Pay is capped at £479.00
- Maximum statutory redundancy pay is capped at £14,370
So if you earn over £479.00 per week then your workplace does not legally have to pay you over this amount for your weekly pay, and if the total of your payout goes over £14,370 then your workplace doesn’t legally have to pay you any amount over this. Again, this is just the legal statutory rate for redundancy pay, certain workplaces may choose to ignore these caps and pay you over the statutory rate.
Exceptions
Finally, it is worth noting that you will not gain redundancy pay if:
- Your employer makes you redundant from your current position but keeps you employed at work in a different role.
- Your employer offers you ‘suitable alternative work’ and you refuse the role without a good enough reason.
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