UK Payroll

A Guide To Redundancy Payments in the UK

Client Advisor Team Leader
September 13, 2022

If you are concerned about a possible redundancy, then it is important to arm yourself with all the knowledge you need regarding your payments – keep reading to learn more.

What is statutory redundancy pay?

As standard, the amount of company redundancy pay you receive can differ based on the business you work for. However, statutory redundancy pay is the amount of money which all employers must pay to employees who have been made redundant. This amount of money is not set, but will rather be based on length of service and salary – the longer you have worked in your position, the higher the overall amount is likely to be.

Do you need to claim statutory redundancy pay?

With statutory redundancy pay-outs, this amount should be automatically paid into your account. You do not need to apply for statutory redundancy pay in order to claim it, as this should be dealt with by your employer.

How do you qualify for statutory redundancy pay?

Not everybody will qualify for statutory redundancy pay – in some cases, you may be more likely to be offered a severance agreement, or perhaps nothing at all. To qualify for statutory redundancy, you will need to have been working in your current workplace for at least two years. If you qualify for statutory redundancy, your employer can then decide to pay more than this amount, but this is done entirely at their discretion.

Will redundancy payments be paid as wages?

Your redundancy payment will not be paid as wages, as this is not seen as taxable earnings. By separating your redundancy payment out, you will not pay tax on this and will receive your complete take-home amount.

Is your redundancy fair?

While redundancy sometimes seems to happen completely out of the blue, there are some situations where it may feel targeted. If you suspect that you have been selected for redundancy unfairly, then this may be a case of discrimination. Consider factors that may play into this such as your race, religion, age or sexual orientation and you may decide that you are being targeted due to a protected characteristic. In this case, additional compensation may be available for you over and above your expected basic redundancy pay.

If you are concerned about redundancy, then our UK payroll services can provide you with clear and compliant information so you can better understand what your payment may be.


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Nena Petrovic
Client Advisor Team Leader
Nena Petrovic is the Client Advisor Team Leader at TopSource Worldwide, a leading Global Expansion services provider. She oversees and guides a team of client advisors, who communicate and collaborate with clients effectively. She is responsible for ensuring the accurate and timely processing of client invoices and payroll, as well as developing strategies and maintaining a client-centric approach.

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