How to Work Out How Much Redundancy Pay You’re Entitled To
If your company is entering liquidation or undergoing financial difficulty, you might be wondering whether you’re entitled to redundancy pay — and if so, how much. Whether you’re a company director, a long-standing employee, or someone affected by a closure, understanding your rights is key.
In this guide, we’ll explain how to calculate redundancy pay, the types of payments available, and what qualifies as employment, especially for directors. We’ll also highlight who pays the redundancy, what counts as service, and how to get started with your claim.
Who Is Entitled to Redundancy Pay?
You may be entitled to statutory redundancy pay if:
- You’ve been employed by the company for two years or more
- You’re working under a contract of employment(including some directors on PAYE)
- You’re being made redundant due to the business closing, restructuring, or being liquidated
If you’re a company director, you can still claim — as long as you can prove:
- You had a genuine employment role(e.g. admin, operations, sales)
- You were paid via PAYE
- You worked a set number of hours per week
What Payments Can You Claim?
Redundancy is more than just a lump sum. If you’re eligible, you may be able to claim up to four types of statutory payments from the government via the Redundancy Payments Service (RPS):
- Redundancy Pay– Based on your age, length of service, and weekly wage
- Notice Pay– If you weren’t given your full notice period
- Holiday Pay– For unused, accrued holiday allowance
- Unpaid Wages– For any outstanding salary owed
How to Work Out Statutory Redundancy Pay
Redundancy pay is calculated using:
- Your age
- Your length of continuous employment(maximum of 20 years)
- Your gross weekly wage(capped at £700 per week as of 2025)
Here’s how it works:
| Age Range | Number of Weeks’ Pay per Year of Service |
| Under 22 | 0.5 week per full year |
| 22 to 40 | 1 week per full year |
| 41 and over | 1.5 weeks per full year |
Example:
Let’s say you’re 45, have worked at the company for 10 years, and earned £650/week:
- You get 6 years at 1.5 weeks = 9 weeks
- You get 4 years at 1 week = 4 weeks
- Total = 13 weeks x £650 = £8,450 redundancy pay
If your weekly pay is over the statutory cap, the maximum will be applied (currently £700/week).
What Counts as Continuous Employment?
- Working under the same contract for two or more years
- Part-time or full-time counts the same
- No break in employment (unless under specific exceptions)
TIP: Even directors who haven’t always drawn a full wage may still qualify if they had a working contract and regular PAYE income.
What Is Notice Pay?
You’re entitled to statutory notice pay unless you worked your full notice period. The rules are:
- 1 week’s notice for 1 month–2 years of service
- 1 week per full year for 2–12 years
- 12 weeks max for over 12 years of service
If your company goes into liquidation and can’t pay, you can claim notice pay from the RPS based on your average weekly earnings.
What About Holiday Pay?
You can also claim for unused accrued holidays, including statutory and contractual holidays. This is calculated based on your annual entitlement, the number of holidays taken, and your gross weekly wage.
How Long Do Claims Take?
Once your claim is submitted to the Insolvency Practitioner, they will verify your employment and submit your data to the Redundancy Payments Service. From there:
- You apply online through GOV.UK
- Decisions usually arrive within 4–6 weeks
- Payments can follow shortly after approval
What If I’m a Director?
If you’re a director, you can still qualify — even if you ran the business. The key requirements are:
- You were paid through PAYE
- You worked a role beyond just governance (e.g. admin, client handling, logistics)
- You had a contract of employment
Many directors don’t realise they’re eligible — some receive £8,000–£15,000+ in valid claims. This is especially helpful when needing to pay for liquidation or manage personal finances.
We Support Directors and Staff Across the UK
Whether you’re in a major city or small village, our team helps workers and directors claim what they’re owed:
Major Cities:
London, Manchester, Birmingham, Glasgow, Liverpool, Leeds, Edinburgh, Sheffield, Bristol, Cardiff, Nottingham, Newcastle, Leicester
Towns:
Cheltenham, Luton, Northampton, Preston, Wolverhampton, York, Exeter, Derby, Milton Keynes, Swansea, Reading
Smaller Towns:
Buxton, Matlock, Walsall, Hinckley, Redditch, Oswestry, Truro, Taunton, Bury, Wigan, Halifax, Barnsley, Maldon, Didcot
Villages:
Alderley Edge, Eccleston, Great Tew, Uffington, Cold Aston, East Ilsley, Bibury, Kelmscott, Beaulieu, Shilton, Fittleworth
What Do I Need to Make a Redundancy Claim?
You’ll need:
- Your employment details
- Your National Insurance number
- Your contract or written terms
- Evidence of hours worked
- Proof of PAYE income
Final Thoughts
Redundancy pay is a legal right — and it’s often available even when you think it’s not. If you’re unsure, speak to one of our team and we’ll assess your eligibility, guide you through the process, and help you get what you’re entitled to.
Whether you’re in Oxford, Bath, Cardiff, or a quiet village in the Cotswolds, our national support team is here for you.
Need help working out your redundancy pay?
Get in touch with The Insolvency People today for free, friendly advice.