UK Redundancy Pay After Tax 2025-26

The first £30,000 of your redundancy payment is completely tax-free. Above that threshold, the surplus is taxed as income. Find your salary and redundancy combination below to see your exact take-home.

How redundancy tax works in 2025-26

Tax-free threshold
First £30,000 — no tax, no NI
Above £30,000
Taxed as income at your marginal rate
NI on redundancy?
No — redundancy is exempt from NI
Tax year
6 April 2025 – 5 April 2026

£20,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £38,000 net

£25,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £38,000 net £50,000 redundancy £46,000 net

£30,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £38,000 net £50,000 redundancy £46,000 net

£35,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £38,000 net £50,000 redundancy £45,054 net

£40,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £38,000 net £50,000 redundancy £44,054 net £75,000 redundancy £59,054 net

£50,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £36,054 net £50,000 redundancy £42,054 net £75,000 redundancy £57,054 net £100,000 redundancy £67,811 net

£60,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £36,000 net £50,000 redundancy £42,000 net £75,000 redundancy £56,000 net £100,000 redundancy £66,100 net

£70,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £36,000 net £50,000 redundancy £42,000 net £75,000 redundancy £54,000 net £100,000 redundancy £65,600 net

£80,000 salary — redundancy payments

£5,000 redundancy £5,000 net £10,000 redundancy £10,000 net £15,000 redundancy £15,000 net £20,000 redundancy £20,000 net £25,000 redundancy £25,000 net £30,000 redundancy £30,000 net £40,000 redundancy £36,000 net £50,000 redundancy £42,000 net £75,000 redundancy £51,382 net £100,000 redundancy £65,100 net

Is your redundancy payment tax-free?

In the UK, the first £30,000 of any redundancy payment — whether statutory or enhanced — is completely free from Income Tax and National Insurance. This applies to both Statutory Redundancy Pay (SRP) and any additional enhanced redundancy your employer chooses to pay.

If your total redundancy payment exceeds £30,000, the amount above the threshold is treated as regular employment income. It is added to your other earnings for the tax year and taxed at your marginal rate — 20% for basic rate taxpayers, 40% for higher rate, or 45% for additional rate.

Important: Unlike salary, the taxable portion of redundancy (above £30,000) is not subject to National Insurance contributions. Only Income Tax applies to the surplus.

Statutory Redundancy Pay cap 2025-26

Statutory Redundancy Pay is calculated based on your age, weekly pay (capped at £643/week), and years of service (maximum 20 years). The multiplier is ½ week per year under age 22, 1 week per year aged 22–40, and 1½ weeks per year aged 41 and over. The maximum statutory redundancy payment is therefore £19,290 (20 years × £643 × 1.5), which falls entirely within the £30,000 tax-free threshold.