Enter your gross pay for each of the 12 weeks before the redundancy notice date. Leave unused weeks at 0.
| Age Band | Service Years | Multiplier | Weeks |
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Redundancy Pay 12 Week Average Wage Formula Calculator
What This Calculator Does and Why It Matters
When an employee is made redundant in the UK, their statutory redundancy pay is calculated using a specific government formula. One key part of that formula is a 12-week average wage — a figure that represents your typical weekly earnings before the redundancy notice date.
This free calculator applies the official UK statutory redundancy formula step by step. Enter your weekly pay for up to 12 weeks, your age, and your years of continuous service to instantly see your estimated entitlement. The tool applies the legal weekly pay cap and the correct multiplier for each age band — giving you a clear, reliable estimate without needing to do the maths yourself.
Knowing your entitlement before your employer makes an offer can be the difference between accepting what is fair and accepting less than you are owed.
How to Use This Calculator
Step-by-Step Instructions
- Enter your age at the date your redundancy takes effect.
- Enter your total years of continuous service with the employer (fractions allowed).
- Enter your gross weekly pay for each of the 12 weeks before your notice date — leave any unused week fields at zero.
- Check or adjust the weekly pay cap (the default is set to the current UK statutory cap of £643 per week).
- Click Calculate Redundancy Pay to see your average weekly pay, capped weekly pay, total week entitlement, and final statutory payout.
The Formula Explained
Breaking Down the Formula
The UK statutory redundancy calculation has three inputs: the 12-week average weekly pay (capped at the legal maximum), your complete years of service (capped at 20), and your age at the time of redundancy. Each year of service earns a different number of weeks' pay depending on which age band it falls in.
Here is how the formula works:
Average Weekly Pay = Total Pay Over 12 Weeks ÷ Number of Weeks Worked
Capped Weekly Pay = Lower of: Average Weekly Pay or £643 (current cap)
Weeks Entitlement = Sum of multipliers for each complete year of service:
— Age under 22: 0.5 weeks per year
— Age 22 to 40: 1 week per year
— Age 41 and over: 1.5 weeks per year
Statutory Redundancy Pay = Capped Weekly Pay × Total Weeks Entitlement
The UK government's official redundancy pay calculator on GOV.UK confirms these rates and the current weekly cap, which is reviewed each April.
Example Calculation with Real Numbers
An employee aged 45 has 10 years of continuous service. Their average weekly pay over the last 12 weeks is £700, but the cap limits this to £643. Of the 10 years: 7 years were worked aged 41 and over (1.5 × 7 = 10.5 weeks) and 3 years worked aged 38 to 40 (1 × 3 = 3 weeks). Total weeks entitlement = 13.5 weeks. Statutory redundancy pay = 13.5 × £643 = £8,680.50.
When Would You Use This
Real Life Use Cases
This calculator is most useful when you receive a redundancy notice and want to check that your employer's offer matches your legal entitlement. It is also helpful if you are an HR professional managing a redundancy process and need to calculate entitlements for multiple employees quickly and consistently. Employment solicitors use similar calculations to assess whether an employee was underpaid at redundancy.
For employees who are also navigating other financial changes at the same time, tools like the employee turnover cost calculator can help employers understand the full financial impact of workforce reductions. Employees themselves may also want to review the income-driven repayment plan calculator if they carry student loan debt and expect a period of reduced income following redundancy.
Specific Example Scenario
A 38-year-old with 6 years of service earns a variable income — some weeks higher due to overtime, others lower. Their employer offers a flat £3,000 redundancy payment. By entering their actual 12 weekly pay figures into this calculator, they find their average weekly pay is £580, which is below the cap. Their 6 years at age 32 to 38 each earn 1 week = 6 weeks. Statutory entitlement is £580 × 6 = £3,480. The employer's offer was £480 short of the legal minimum.
Tips for Getting Accurate Results
Use Gross Pay — Not Take-Home Pay
The 12-week average is always calculated on gross weekly pay — before tax and National Insurance deductions. Do not enter your take-home or net pay figures. If you are paid monthly, convert to weekly by multiplying your monthly gross by 12 and dividing by 52. If your pay varies due to overtime or commission, including all those amounts in the weekly figures is the right approach.
Only Count Weeks Where You Actually Worked
Weeks where you received no pay — such as unpaid leave or a week you were off sick without pay — are generally excluded from the 12-week average. You should still count any week where you received statutory sick pay (SSP), holiday pay, or other paid leave. The idea is to represent a typical working week. If you only worked 8 of the last 12 weeks with pay, divide by 8, not 12.
Verify Your Continuous Service Start Date Carefully
Continuous service counts from your first day with the employer, not from any later contract or role change. If you were promoted, moved departments, or had your contract renewed without a break, your service continues unbroken from the original start date. Gaps of more than one week can break continuity in certain circumstances, so check your employment records carefully. The ACAS guide to redundancy pay covers edge cases for continuity of employment in detail. For employees navigating related financial planning around salary packaging, the salary packaging calculator may also be a helpful companion tool.
Frequently Asked Questions
What is the 12-week average wage in redundancy calculations?
The 12-week average wage is your average gross weekly pay calculated from the 12 weeks immediately before your redundancy notice date. It represents your normal weekly earnings and is used as the base pay figure in the statutory redundancy formula. It is then compared to the legal weekly pay cap, and the lower figure is used.
What is the current weekly pay cap for redundancy in the UK?
As of April 2024, the weekly pay cap for statutory redundancy purposes in the UK is £643. This cap is reviewed each April and may increase. If your average weekly pay exceeds this amount, only £643 is used in the calculation. The cap applies to gross weekly pay, not take-home pay.
How many years of service count toward redundancy pay?
A maximum of 20 complete years of service can count toward statutory redundancy pay in the UK. If you have worked for 25 years, only the most recent 20 years are counted. Only complete years count — partial years are not included, so 7.5 years of service counts as 7 years.
Does age affect redundancy pay entitlement?
Yes, significantly. The UK statutory formula gives a higher multiplier to older employees. Service worked under age 22 earns 0.5 weeks' pay per year. Service between ages 22 and 40 earns 1 week per year. Service worked aged 41 or over earns 1.5 weeks per year. This means older employees with long service receive the highest entitlements.
Is statutory redundancy pay taxable?
The first £30,000 of any redundancy payment — statutory or enhanced — is generally free from income tax and National Insurance in the UK. Amounts above £30,000 are subject to income tax in the normal way. Since the statutory cap is relatively low, most statutory redundancy payments fall well within the tax-free threshold.
Can an employer pay more than the statutory minimum?
Yes. The statutory calculation sets the legal minimum, but many employers offer enhanced or contractual redundancy pay — which can be a multiple of statutory pay, use a higher weekly cap, or have no service cap. Any enhanced scheme terms should be in your employment contract or redundancy policy. Always ask your employer whether an enhanced scheme applies before accepting any offer.
What if my pay varies each week due to overtime or commission?
Variable pay including overtime and commission that you are contractually entitled to is included in the 12-week average. Purely voluntary overtime may or may not count depending on case law and your contract. If your income fluctuates significantly, including all regular variable payments gives the most accurate average and highest legitimate entitlement.
What happens if I was on reduced hours before redundancy?
If you were placed on short-time working or temporarily reduced hours in the 12 weeks before redundancy, those lower pay weeks would reduce your average — potentially lowering your entitlement. In some cases, employees can request that the 12-week window be extended further back to a period of normal pay, particularly if the reduced hours were specifically related to the impending redundancy. This is worth discussing with ACAS or an employment solicitor.
Conclusion
Understanding your redundancy pay entitlement starts with getting the 12-week average weekly wage calculation right. This free tool walks through every step of the UK statutory formula — from your variable weekly earnings to the final payout — so you can verify any offer your employer makes before you sign anything.
If you are navigating redundancy alongside other financial concerns, explore the full range of employment and financial planning calculators at ToolCR.com. From severance pay to retirement planning, the right tools make a difficult situation easier to manage.