# Is there a limit on how much my redundancy pay can be?

- Jurisdiction: United Kingdom
- Practice area: Employment Law
- Published: 2026-10-31
- Last updated: 2026-10-31
- Canonical: https://lawasked.com/uk/employment-law/there-limit-how-much-my-redundancy-pay-can

## Question

I am currently living in England and facing a very difficult situation at my workplace. I have been employed as a senior manager at a logistics firm for over twelve years, and I have always taken great pride in my labour and dedication to the company. However, on the 14th of last month, my manager sat me down and informed me that due to a massive restructuring programme, my role is being made redundant effective immediately. My current weekly pay is actually quite high, around £1,200 per week, because of my seniority and various bonuses I receive. I have already spoken to my HR department to ask about my final settlement, and they mentioned that while I am entitled to a redundancy payment based on my years of service, there might be a cap on the calculation. I have tried looking through my initial employment contract to see if there were any specific clauses about this, but I couldn't find anything clear. I am trying to budget for my mortgage and upcoming bills, so I really need to know if the amount they use to calculate my weekly pay for the redundancy package is limited to a certain amount, or if they must use my full £1,200 weekly salary for the whole calculation.

## Summary

Yes, there is a limit on the weekly pay used to calculate your statutory redundancy pay. For your calculation, the law caps the amount of a week's pay at £751, regardless of your actual £1,200 weekly salary.

## Analysis

Under the Employment Rights Act 1996, there is a specific limit on the amount of money used to calculate your statutory redundancy pay (the legal minimum amount an employer must pay when a job is no longer needed). 

For your specific situation, even though you earn £1,200 per week as a senior manager, the law restricts how much of that income can be used for the calculation. The statute states that "the amount of a week’s pay shall not exceed £751" [1]. This means that when your employer calculates your redundancy package based on your twelve years of service, they are legally permitted to use £751 as your weekly rate instead of your actual £1,200. 

It is also important to note how the timing of your redundancy affects the math. The law provides rules for determining the "calculation date" [2], which is the specific date used to figure out your pay. For example, if you were dismissed with notice, the calculation date is usually the day before your notice period begins [2]. 

While the statutory amount is capped, this does not necessarily mean your total settlement will be low. This cap only applies to the legal minimum (statutory) calculation. If your employment contract includes a "contractual redundancy" clause, your employer might be required to pay you based on your full £1,200 salary. The law provided here only governs the mandatory minimums set by the government, not any extra benefits your company might have promised you in your contract.

## Statutory citations

- Employment Rights Act 1996, Section 227 - Maximum amount. [in force] (https://www.legislation.gov.uk/ukpga/1996/18/section/227)
  > For the purpose of calculating... a redundancy payment, the amount of a week’s pay shall not exceed £751
- Employment Rights Act 1996, Section 226 - Rights on termination. [in force] (https://www.legislation.gov.uk/ukpga/1996/18/section/226)
  > Where the calculation is for the purposes of section 88 or 89, the calculation date is the day immediately preceding the first day of the period of notice required by section 86(1) or (2).

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