UK Redundancy Tax Calculator 2026/27

Enter your redundancy package and we'll show you exactly what's tax-free, what gets taxed at PAYE rates, and what ends up in your pocket. Models the £30,000 termination-payment threshold, PILON, holiday pay and Class 1A NIC under Section 401 ITEPA 2003.

Your redundancy package

Statutory redundancy pay (£)The legal minimum your employer must pay. Capped at £700/week × 20 years × 1.5 weeks = £21,000 max in 2026/27.Enhanced (employer top-up) redundancy pay (£)Anything above the statutory minimum, paid as redundancy compensation. Counted toward the £30k tax-free pool.PILON - Payment in Lieu of Notice (£)Pay for the notice period your employer is not making you work. Taxed as ordinary PAYE + NIC since April 2018, regardless of contract.Holiday pay (£)Unused holiday days paid out as cash. Taxed as ordinary PAYE + NIC.Salary to last day (£)Ordinary salary worked up to your final day. Taxed as PAYE + NIC.Your marginal income tax rateThe rate that applies to the next pound of your taxable income. Basic = 20%, higher = 40%, additional = 45%.

Your result

Enter your redundancy package on the left and click Calculate. All figures are computed locally in your browser - nothing is sent anywhere.

How this calculator works

The calculator applies the rules in Section 401 of the Income Tax (Earnings and Pensions) Act 2003: the first £30,000 of genuine redundancy compensation is tax-free; anything above is taxed at your marginal income tax rate. PILON (Payment in Lieu of Notice) and holiday pay are treated as ordinary earnings - full PAYE and NIC apply. Class 1A NIC (15% in 2026/27) is paid by the employer on excess termination payments above £30,000 and does not appear on your payslip.

Read our deeper redundancy pay tax UK guide for the worked examples, salary-sacrifice escape route, and what to do if your final payslip looks wrong.

Disclaimer: PayslipIQ provides automated educational guidance based on the figures you supply. It is not regulated tax, financial or legal advice. Redundancy cases often have complications (settlement agreements, restrictive covenants, share-options unwinding) that need a qualified accountant or solicitor. For payments above £30,000 or where a settlement agreement is involved, get advice before signing.