Statutory redundancy pay from April 2026: the £751 weekly cap and £22,530 maximum, worked for three staff

A recruitment agency has a quiet quarter. A client with a large contract goes in house, and the agency has to look at its own team: two consultants and a resourcer. Before anyone talks to them, the owner wants to know what statutory redundancy pay would be. The rule is mechanical, and it is worth working through once with real numbers.

The rule on GOV.UK

For each full year of service, the amount depends on the employee's age during that year:

• under 22: half a week's pay for each full year;
• 22 to under 41: one week's pay for each full year;
• 41 or older: one and a half weeks' pay for each full year.

Two caps apply for redundancies on or after 6 April 2026. Weekly pay is capped at £751, and length of service is capped at 20 years. The maximum statutory amount is £22,530. That figure is exactly 30 weeks multiplied by £751, which is 20 years at one and a half weeks.

The page does not restate the qualifying period for the entitlement or what counts as a week's pay for people with variable earnings, so check both before you quote a figure to anyone.

Three staff worked through

A senior consultant, age 45, 12 years' service, £900 a week. Service began at 33. Eight years were at ages 33 to 40, one week each; four years were at 41 and over, one and a half weeks each. That is 8 + 6 = 14 weeks. The £900 is above the cap, so the week is £751. Statutory pay is 14 × £751 = £10,514.

A resourcer, age 24, 3 years' service, £480 a week. Service began at 21. The first year was under 22, so half a week. The next two were at 22 and 23, so one week each. That is 2.5 weeks × £480 = £1,200.

A director, age 58, 22 years' service, £1,100 a week. Only 20 years count, all of them at 41 or over (service began at 36; the 20 counted years are the most recent, so the earliest two years, at ages 36 and 37, drop out). The 20 counted years are the most recent: ages 38, 39 and 40 at one week, then 17 years at one and a half. That is 3 + 25.5 = 28.5 weeks × £751 = £21,403.50. The maximum of £22,530 needs 30 weeks, so this person does not reach it, because three of the counted years fell before age 41.

Where owners go wrong

• They use today's age for every year. The band depends on the age in each year of service, which is why the director above falls short of the maximum.
• They forget the cap on weekly pay. A consultant on a base plus commission can be well over £751, and the cap applies from the first pound over.
• They treat the cap as a limit on every payment. The page sets it for statutory pay. I did not read how it interacts with any contractual scheme, so check the contract.

What it means for an agency's planning

The statutory sum is a calculation you can do in advance; the notice period and the time the process takes sit alongside it and are not in this guide. Dates under the new employment rules are in our guide to the Employment Rights Act 2025 dates for agencies.

Temps are a separate question. Whether a worker is an employee of the agency decides if these rules apply to them at all, and I did not read that test for this guide. The 12 week rule calculator shows which workers have reached the equal-treatment threshold, and the temp margin calculator shows what a placement costs in employer costs.

I did not read, for this guide, the consultation duties for redundancy or the notice rules. Both can cost more than the statutory sum, so check them before you act.

Overlyft builds AI staff who join your agency's back office, pull each employee's start date, age and weekly pay from your payroll export, work out the statutory figure with the cap and prepare a worksheet for you to review before it goes anywhere near a conversation.

This is general information, not legal advice. Check GOV.UK and take advice before making anyone redundant.