Redundancy Pay Calculator 2026/27

Being made redundant is stressful — understanding what you actually keep from your payout should not be. This calculator breaks down your redundancy payment into the tax-free portion (up to £30,000) and the taxable excess, showing you exactly what you take home.

How redundancy pay is taxed

The first £30,000 of a genuine redundancy payment is exempt from income tax and National Insurance. Any amount above £30,000 is added to your income for the year and taxed at your marginal rate.

Important: Pay in Lieu of Notice (PILON), holiday pay, and bonuses are always taxed as normal earnings — they do not count towards the £30,000 exemption.

What counts towards the £30,000?

• Statutory redundancy pay
• Enhanced/contractual redundancy pay
• Ex-gratia payments for loss of employment

Reducing tax on amounts over £30,000

If your redundancy payment exceeds £30,000, you can ask your employer to pay the taxable excess directly into your pension — this avoids income tax on that portion (up to the Annual Allowance). See our redundancy pay tax guide for full details.

Estimate your overall tax position

Use the income tax calculator to model your total income for the year (salary earned before redundancy + taxable portion of redundancy) and see your combined tax liability.