UK redundancy payment tax calculator 2026/27
Separate qualifying termination compensation from taxable notice pay, holiday pay and bonuses to estimate tax and National Insurance.
How the Redundancy payment estimate works
The redundancy tool separates a qualifying termination award from notice pay, holiday pay, arrears and bonuses. It applies the £30,000 exemption only to the entered qualifying award and taxes ordinary earnings normally.
Rules checked
Read the checking method
What the result includes
- The qualifying termination exemption up to £30,000
- Income Tax on taxable termination and ordinary pay
- Employee NI on ordinary pay and employer Class 1A on excess award
What to have ready
- Employer’s written payment breakdown
- Contractual and worked notice details
- Other taxable income in the same tax year
Questions about Redundancy payment
Is every redundancy payment tax-free up to £30,000?
No. The exemption is for qualifying termination awards. Salary, holiday pay, bonuses, arrears and post-employment notice pay are generally ordinary taxable earnings.
Why is notice pay especially important?
Statutory post-employment notice-pay rules can treat part of an award as earnings even when a document uses a different label.
About this estimate
Post-employment notice pay and the legal character of each payment can be complex. Payroll timing and tax code treatment can differ from this annual estimate.