The HR Doctor
Customer loginActivate
Back to The HR Doctor Redundancy Guide

Free. No sign-up. Every line in 30 seconds.

How much does it cost to make an employee redundant?

Work out what one redundancy costs your business: statutory redundancy pay, notice pay, untaken holiday and any enhanced payment, then the total. It uses the rates for redundancies on or after 6 April 2026, in England, Scotland and Wales.

Working out your own redundancy pay? Use the calculator on the main site.

Enter the numbers

Three inputs give statutory redundancy pay and notice pay. The calculator applies the statutory caps and lets you know when one applies.

The employee's age in whole years on the date of dismissal.

Continuous service with your business. Count 3 years and 9 months as 3. Only the last 20 years count for redundancy pay, and 2 are needed to qualify.

Average weekly pay before tax over the 12 weeks before notice. For redundancy pay, pay above £751 a week counts as £751; notice and holiday pay use the full amount.

£
What the exit costs in full

Optional. Leave blank what does not apply.

Notice

The statutory minimum: one week from one month's service, then one week for each full year from 2 to 12. If the contract gives more, the contract applies. Worked or paid in lieu, it costs the same.

Annual leave built up and not taken by the leaving date, in whole or half days. The statutory minimum is 5.6 weeks a year, 28 days for a five-day week.

For the daily holiday rate: weekly pay divided by the days worked in a normal week.

Anything you choose to pay on top of statutory redundancy pay. Leave it blank if none.

£

What does the calculator leave out?

It gives the cost of a redundancy done properly. The larger costs sit in the process: legal fees if a decision is challenged, compensation if a tribunal finds a dismissal unfair, management time at every stage and the trust of the team who stay.

Does paying redundancy pay make the dismissal fair?

No. Redundancy pay is due whether or not the process was fair. If a tribunal finds the dismissal unfair, it can add a compensatory award. For dismissals before 1 January 2027 the cap is £123,543 or a year's gross pay, whichever is lower. From 1 January 2027 the Employment Rights Act 2025 removes the cap.

When do I have to consult collectively?

When you propose 20 or more redundancies at one establishment within 90 days. If you do not consult collectively, a tribunal can award up to 180 days' pay for each affected employee; the maximum doubled from 90 days on 6 April 2026. Below 20, you still consult each employee individually.

How is redundancy pay taxed?

The first £30,000 of statutory redundancy pay and any enhanced payment combined is not usually taxed. Above it, income tax applies and the employer pays Class 1A National Insurance at 15% on the excess. Notice pay, including pay in lieu of notice, and holiday pay carry tax and National Insurance as normal pay.

Where does the Redundancy Guide come in?

The calculator gives you the cost of one exit. The Guide walks you through the fair process behind it: consultation, selection, alternatives, the decision and the appeal, with the letter for each step generated for you and a tribunal-ready record at the end. It is from £2,000 plus VAT, paid once per redundancy round.

A 15 minute demo walks through your situation and the full cost of getting it wrong, and of getting it right.

Sources: Employment Rights Act 1996, s.86 (notice) and s.162 (redundancy pay); the Employment Rights (Increase of Limits) Order 2026 (the £751 weekly cap and the £123,543 award cap); the Working Time Regulations 1998, regs 13, 13A and 14 (holiday); the Income Tax (Earnings and Pensions) Act 2003, s.403 (the £30,000 threshold); the Employment Rights Act 2025; gov.uk, Making staff redundant; gov.uk, Holiday entitlement; gov.uk, Tax on termination payments; gov.uk, Rates and thresholds for employers 2026 to 2027; Acas, Managing a redundancy process.

Figures checked against the legislation on 26 October 2026.

Built in Stoke-on-Trent, for employers across Staffordshire, Cheshire, Derbyshire, Shropshire and the West Midlands.

Book a 15 minute demo

Fifteen minutes on the tool, with your situation in mind. You leave knowing what the Redundancy Guide will and will not do for you. You also get a straight answer on whether it fits, or whether you need hands-on support instead.

No pressure and no follow-up chase. One clear answer, then back to running your business.

Calendar not showing? Book on Calendly instead.

Take the seven-step process with you

The Redundancy Roadmap puts the process OES HR runs with its retained customers on one page. Seven steps, from defining why the redundancy is needed to a dignified exit. It is built to sit on your desk while you work. No sign-up and no email address needed.

Download the Redundancy Roadmap (PDF)