What are Statutory Redundancy Payments?
If you lose your job because your employer no longer needs someone to do that particular work, you may be entitled to redundancy payment.
In some circumstances special redundancy arrangements may be included in your contract. However, if you have been working continuously for the same employer for more than two years you will usually be entitled to a Statutory Redundancy payment.
The amount of Statutory Redundancy pay you receive will depend on your age, your earnings, and how long you have been working for your employer. Statutory Redundancy pay is paid as a single lump sum, and is calculated by multiplying your weekly pay by the number of years you have worked for your employer (to a maximum of 20 years). This figure is then adjusted upwards for years worked when you were over 41, or downwards for years when you were under 22.
If you work full time and you are temporarily laid off (for four weeks continuously, or for six weeks in a 13 week period) you may be entitled to Statutory Redundancy pay, although you may need to write to your employer to ask for this. In these circumstances, if you think you may be eligible for Statutory Redundancy pay, you should ask your employer.
The first £30,000 of redundancy payments are non-taxable. This includes Statutory and most non-Statutory Redundancy pay. All redundancy payment in excess of that figure will contribute to your taxable income.