Maximum Redundancy Pay in the UK (2026)

There is a ceiling on how much statutory redundancy pay any employee can receive in the UK. For the 2025/26 tax year, that maximum is £21,570. This guide explains how the maximum is calculated, who qualifies for it, and how it has changed over time.

The current maximum: £21,570

The maximum statutory redundancy pay for the 2025/26 tax year is £21,570. This figure is the absolute most that any employee can receive under the statutory formula, regardless of their salary, length of service or age. It represents the scenario where every element of the formula is at its highest possible value.

This maximum is always well below the £30,000 threshold at which redundancy payments become taxable, so the full statutory amount is always received tax-free.

How the maximum is calculated

The statutory redundancy formula has three variables, each of which has a cap:

1. Years of service: capped at 20 years
2. Age-based multiplier: the highest is 1.5 weeks' pay per year (for workers aged 41 and over)
3. Weekly pay: capped at £719 for 2025/26 (£749 in Northern Ireland)

When all three are at their maximum:

20 years × 1.5 × £719 = £21,570

This arithmetic is straightforward: 20 × 1.5 = 30 weeks' pay at £719 per week = £21,570.

Who qualifies for the maximum?

To receive the full £21,570, an employee would need to satisfy all three conditions simultaneously:

• At least 20 years of continuous service — and all 20 of those years must have been completed while aged 41 or over (to attract the 1.5 multiplier for every year)
• Aged 61 or over at the date of redundancy — this is the minimum age at which someone could have 20 years of service all falling within the 41+ age band (having started employment at age 41)
• Weekly pay of at least £719 (£749 in NI) — equivalent to an annual salary of roughly £37,388 or more

In practice, very few employees will meet all these criteria exactly. Many long-serving employees will have some years of service that fall below age 41, which means those years attract the lower 1.0 or 0.5 multiplier. The theoretical maximum of £21,570 is therefore a ceiling that most people will not reach.

Realistic maximum scenarios

To give a more practical picture, here are the statutory redundancy amounts for some realistic long-service scenarios, all using the £719 weekly pay cap (amounts would be slightly higher at the £749 NI cap):

As you can see, even with the full 20 years of service and earnings above the cap, the actual amount varies significantly depending on which age bands your years of service fall into. The employee who started at 18 receives roughly 60% of the theoretical maximum, despite having the same length of service.

Historical maximum amounts

The maximum statutory redundancy pay changes each year because the weekly pay cap is reviewed annually. Here is how the maximum has increased over recent years:

The increase from 2022/23 to 2024/25 has been notably larger than in previous years, partly reflecting higher inflation during that period. The weekly pay cap is typically uprated in line with the Retail Prices Index (RPI), and the significant RPI increases of 2022–2024 fed through into a larger-than-usual jump in the cap.

How does the maximum compare to actual redundancy packages?

While the statutory maximum of £21,570 may seem low relative to the salaries of long-serving employees, it is important to remember two things:

1. Many employers pay more. Enhanced or contractual redundancy schemes frequently exceed the statutory maximum by a significant margin. In the public sector, financial services and large corporates, redundancy payments of several months' or even a year's salary are not uncommon. See our guide to statutory vs contractual redundancy pay for more detail.
2. Redundancy pay is separate from notice pay. In addition to your redundancy payment, you are entitled to your notice period pay (statutory or contractual), which is based on your actual salary without a cap. For a long-serving employee with a contractual notice period of three or six months, this can add a substantial sum to the total package.

Factors that reduce your payment below the maximum

Several factors can result in a statutory payment well below the theoretical maximum:

• Fewer than 20 years' service: Most employees do not spend 20 years with the same employer. The median job tenure in the UK is around 5 years.
• Younger age: Years of service below age 41 attract a lower multiplier (1.0 or 0.5), reducing the total. Read our guide to how age affects redundancy pay for detailed examples.
• Earnings below the cap: If you earn less than the weekly pay cap (£719, or £749 in Northern Ireland), your actual weekly pay is used, resulting in a proportionally lower payment.

Can you exceed the statutory maximum?

You cannot exceed the maximum through the statutory formula alone. However, your total redundancy package can exceed £21,570 if your employer offers:

• Contractual or enhanced redundancy pay with more generous terms
• A settlement agreement with additional compensation
• Payment in lieu of notice on top of the redundancy sum
• Additional ex gratia payments

If your total redundancy package (all elements combined) exceeds £30,000, the amount above that threshold will be subject to income tax and National Insurance.

For higher earners affected by the weekly pay cap, our guide on redundancy pay if you earn over £719 per week explains your options in more detail.