Redundancy Pay - How Much Redundancy Pay Will You Get?

Posted by Rikesh shonchhatra on December 14th, 2019

If you are doing in the same job for at least two years your employer has to pay you redundancy payment. The legal minimum is called ‘statutory redundancy pay’, but checks your agreement – you might make more.

Are you entitled to redundancy pay?

When you work continuously for two years for your employer or more and they earn you redundant you have right to redundancy pay.

Contractual redundancy pay and statutory redundancy pay are legal. Statutory redundancy pay is the legal minimum. Your employer doesn't have to pay you less than this. But both might have to pay you higher if the contract of your employment says so.

It could indicate a greater lump sum or receive a payout even if you have worked beyond for less than two years. If there’s no redundancy mention in your staff handbook or contract, you should appropriate you will receive the legal minimum. Check contract of your staff handbook or employment to find out regarding your ‘contractual redundancy pay’.

How much redundancy pay will you get?

How much you get depends on statutory redundancy pay: How long you have been in the job the age you were in per year you worked beyond, and your salary – up to a maximum of £525 every week in 2019/2020 Currently, in Northern Ireland £500.

There is an overall redundancy pay the maximum amount you can receive which is capped at £15,750 in 2019-2020 (in Northern Ireland £16,410), even if your actual incomes are higher or your service length is longer than this.

Only complete service count years and service have to be continuous.

£30,000 Redundancy Pay is tax-free

When you are made redundant, you are likely to receive a mix of redundancy pay (which is compensation for your job loss) and other amounts owed to you.

The first your redundancy pay of £30,000 is tax-free – neglectful of whether you obtain the legal minimum or a more bountiful payout from your employer.

You will not have to pay National Insurance on it unless. But holiday pay, pay in lieu declaration and any other values that are paying for your work preferably than compensation for the job failure are taxed as pay.

When your employer has not been paying national minimum wage you, your amount of redundancy pay must be paid at the National minimum wage level for the weekly hours you had worked. It is opposite the law not to pay you the National Minimum Wage.

A maximum of twenty years’ service is taken inside an account and there is a limit to the weekly pay for statutory redundancy goals, which in 2019 was set at £525. It proposes that the maximum amount under the statutory scheme is £15,750 currently (i.e. £525 in 30 weeks).