Redundancy Pay

Redundancy Pay made simple

Redundancy Pay made simple

In the event of redundancy an employee should be entitled to redundancy pay as long as they have been working for their current employer for at least 2 years – even in the case of an expired fixed term 2 year contract which is not renewed due to redundancy.

Employees do not need to claim redundancy pay from their employer – it should be paid automatically. The amount of statutory redundancy pay they are entitled to depends upon age, pay, and how long they have been working for the employer. Entitlement is as follows:

  • Half of a week’s pay for each complete year they were employed under the age of 22.
  • 1 week’s pay for each complete year they were employed at the age of 22 or older, but under 41.
  • 1 and a half week’s pay for each complete year they were employed at the age of 41 or older.

If the amount payable is under £30,000 it isn’t taxable but the employer will need to deduct any tax and National Insurance contributions from any wages or holiday pay they owe.

Employees will not be entitled to redundancy pay if the employer offers to keep employing them in suitable alternative work which they refuse without good reason, or if they are dismissed for misconduct.

This information is intended as a referencing guide only. Please visit the HMRC website for more detailed information and current updates.

As part of our payroll services, we provide help and guidance in the event of redundancies. To find out how you can benefit from A.S.A.P.’s payroll services, speak to one of our friendly team now on 01621 829632.

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