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.

Example figures Change them to match your circumstances.

Income already received

Use taxable income for the same tax year before leaving.

Income Tax region
year£2,917 per month

Leaving payments

Separate genuine termination compensation from notice pay and ordinary earnings.

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.