How statutory redundancy pay is calculated
Statutory redundancy pay is the legal minimum, set by the Employment Rights Act 1996 — a floor, not a target. It depends on your age at the end of each year of service, your length of service, and your weekly pay capped at the statutory limit.
Weekly pay cap from 6 April 2026: £751. If your actual weekly gross exceeds this, only £751 counts. Maximum statutory payout: £22,530 — achieved only with 20 qualifying years all over age 41.
The age-band multiplier
| Age at end of that service year | Weeks of pay per year |
|---|---|
| Under 22 | 0.5 weeks |
| 22 to 40 | 1.0 week |
| 41 and over | 1.5 weeks |
Worked example: a 45-year-old with 18 years' service on £42,057 (M5 outside London), pay capped at £751: 5 years aged 41–45 (7.5 weeks) + 13 years aged 27–40 (13.0 weeks) = 20.5 weeks × £751 = £15,395.50. The calculator applies this year-by-year and shows the full breakdown.
Why statutory pay stops increasing after 20 years
Only the most recent 20 years count toward the statutory calculation — a legal maximum set by Parliament. Teachers with 25 or 30 years of service see the payout cap at £22,530 regardless. The Burgundy Book enhanced scheme has no such cap (see below).
What the Burgundy Book adds
If your contract incorporates the Burgundy Book (Annex B), you get one month's pay per complete year of service — no 20-year cap, no weekly pay cap:
For the same M5 teacher above (18 years, £42,057): 18 × £3,504.75 = £63,085.50 — a £47,690 advantage over the statutory figure. A minimum of two years' service is required if under 50; teachers over 50 have no service qualification.
Year-by-year comparison
| Years | Annual gross | Statutory pay | Burgundy Book pay | Advantage |
|---|---|---|---|---|
| 5 years | £37,101 (M3) | £3,755 | £15,459 | +£11,704 |
| 10 years | £39,556 (M4) | £7,510 | £32,963 | +£25,453 |
| 15 years | £42,057 (M5) | £11,265 | £52,571 | +£41,306 |
| 20 years | £45,352 (M6) | £15,020 | £75,587 | +£60,567 |
| 25 years | £47,472 (U1) | £22,530* | £98,900 | +£76,370 |
*Statutory caps at 20 years; Burgundy Book continues uncapped.
Which teachers receive Burgundy Book terms?
Maintained school teachers are almost always covered by default. Academy teachers vary — many that converted from maintained schools retained original terms under TUPE, but new hires may differ; check your individual contract, not just your school's general policy. Service across different local authority schools counts as continuous for statutory purposes under the Redundancy Payments Modification Order. Agency supply teachers generally don't qualify for redundancy pay from the school — see our supply teacher calculator for how agency vs direct employment affects entitlements more broadly.
Your notice pay entitlement
| Continuous service | Statutory minimum notice |
|---|---|
| 1 month to 2 years | 1 week |
| 2 to 12 years | 1 week per year of service |
| 12 years or more | 12 weeks (maximum) |
The Burgundy Book may set a longer contractual notice period — always check your specific contract. Payment in lieu of notice (PILON) is taxed as normal earnings, not covered by the £30,000 redundancy exemption.
How redundancy pay is taxed
The first £30,000 of a genuine redundancy payment — statutory plus any enhanced amount combined — is tax-free. Above that, it's taxed at your marginal rate. If your part-time weekly pay applies here, see our part-time calculator for how your actual salary is determined. Notice pay and holiday pay for untaken leave are taxed separately as normal earnings, outside the £30,000 threshold.
If you think your redundancy is unfair
Unfair redundancy claims go to an employment tribunal — you have three months less one day from your dismissal date to begin ACAS early conciliation (0300 123 1100, acas.org.uk). Common grounds include inadequate consultation, a discriminatory selection pool, not considering suitable alternative roles, or selection on automatically unfair grounds (pregnancy, union activity, whistleblowing, flexible working requests). Contact your union rep or Acas before accepting any settlement.
Frequently asked questions
What is the weekly pay cap for redundancy in 2026?
From 6 April 2026, £751, set by the Employment Rights (Increase of Limits) Order 2026. Maximum total statutory redundancy pay is £22,530. Terminations before 6 April 2026 use the previous £719 cap.
How many years count toward statutory redundancy pay?
A maximum of 20 — the 20 most recent years. Service beyond that is disregarded statutorily, though the Burgundy Book has no such cap. Partial years never count in either scheme.
Do I need two years of service to qualify?
Yes, for statutory redundancy. Burgundy Book enhanced redundancy also needs two years if under 50 — over 50, there's no service qualification. Agency supply teachers generally don't qualify from the school.
What is the Burgundy Book redundancy entitlement?
One month's pay per complete year of service, uncapped by years or weekly pay. For 15 years on M5 (£42,057): 15 × £3,504.75 = £52,571, versus £11,265 statutory.
How much of my redundancy pay is tax-free?
The first £30,000 of the combined statutory plus enhanced payment. Above that, taxed at your marginal rate. Notice pay (worked or PILON) is fully taxable separately.
Does redundancy pay affect my Teachers' Pension?
Your accrued TPS pension up to dismissal is unaffected. If you're over 55 with two years' qualifying membership, you may be able to access your pension immediately on redundancy ('redundancy retirement') — see our pension calculator for the fuller picture.
My school is a multi-academy trust — which employer counts for continuity?
Service across schools within the same trust generally counts as continuous, since the trust is the employer. Moving between different trusts is more complex — TUPE protections may apply. Seek union advice before accepting terms that reset your service.
What is the time limit for challenging an unfair redundancy?
Three months less one day from your dismissal date to begin ACAS early conciliation — a strict deadline. Contact your union or Acas immediately if you believe your redundancy was unfair.