Redundancy pay to rise again

It has been confirmed that statutory redundancy pay will rise from the April and will apply to all dismissals where the effective date of termination is on or after the 6th April 2018. These new rates will also apply to any calculations being made to the costs of any future redundancies.

Where the dismissal falls before the 6th April, the old redundancy rates will apply.

Employers that dismiss employees for redundancy must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The weekly pay is subject to a maximum amount, which is £508.

New redundancy payments

The new rates can be summarised below:

  • £508 will be the maximum amount of a week’s pay for calculating statutory redundancy pay, and the basic award for unfair dismissal (up from £489).
  • £15,240 will be the largest possible statutory redundancy payment or basic award (up from £14,670).
  • £83,682 will be the maximum compensatory award which can be made after a successful “ordinary” unfair dismissal claim (up from £80,541).
  • £98,922 is the maximum potential award for unfair dismissal when the basic and compensatory awards are combined (up from £95,211).

To calculate redundancies before 6th April

To calculate redundancy payments before the 6th April, use the calculator found here.


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