Redundancy Tax
Redundancy pay tax calculator — the £30,000 tax-free limit.
You keep
£38,690
Tax on the package: £2,310. The first £30,000 of redundancy pay is tax-free.
- Statutory entitlement
- 10 weeks' pay
- From age and service
- Tax-free redundancy
- £30,000
- Taxable excess
- £5,000
- No employee NI
Your package after tax
Part of the excess over £30,000 can often go into your pension through the employer, tax- and NI-free. Ask before the payment is made.
Rates and rules from Redundancy pay (GOV.UK).
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Expert help
Turn your estimate into the right tax decision.
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Ask an accountantQuestions
Frequently asked
questions.
Is redundancy pay taxable?
Statutory and non-contractual redundancy pay is tax-free up to £30,000 in total. The excess is taxable as income. Contractual payments, notice pay and holiday pay are taxed as earnings.
Is payment in lieu of notice taxed?
Yes. Since April 2018 all payments in lieu of notice are treated as earnings and subject to Income Tax and National Insurance, even if not in your contract.
Can I put redundancy pay into my pension?
Many employers will pay part of a redundancy package into your pension as an employer contribution, which is free of tax and NI. It needs to be agreed before the payment is made.
Will I get tax back after redundancy?
Often, if you have been taxed on an emergency code or do not work for the rest of the tax year. A refund can be claimed from HMRC or comes automatically through your next employer.
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