Employees must have 2 years continuous service to qualify for a statutory redundancy payment.
Statutory redundancy entitlement varies by age and service as follows: half a week’s pay for each complete year of employment below the age of 22; a full week’s pay for each year between 22 and 40; a week and a half’s pay for each year above the age of 41. A maximum of 20 year’s service is taken into account, so the maximum SRP payment would be 20 X 1.5 X 508 = £15,240.
Regular commission should be included in a week’s pay, but overtime pay is not unless it is contractually required. If earnings vary each week, an average of the 12-week period leading up to the redundancy is used.
The first £30K of redundancy pay can be paid free of tax, but notice pay is taxable and subject to normal deductions.
For a full list of rates and measures look at our HR and employment law fact card. If you’d like a hardcopy, contact us and we’ll send you one (while stocks last.)