Your minimum statutory redundancy pay is based on how long you have worked at the company, your age and weekly pay up to a certain limit (£400 current maximum which was increased on 1 February 2011).
Please note that your employment contract may include more generous packages but if it’s not the case an employer cannot offer you less than the statutory minimum.
Statutory redundancy payout calculator is a great tool to calculate statutory redundancy payout. This calculator is extremely important for people that have been fired or fear that the company may sack them in a short period of time. The tool also can be useful for those people that have stable job but want to put aside some money for extreme and unforeseen cases like redundancy. Statistics show that a lot of people do not have enough savings and once they become redundant financial problems start. By simply spending a coupe of minutes and inserting most basic information into the calculator the person can calculate how much money he will get after becoming redundant.
According to the laws, minimum statutory payout is based on three factors. These factors are also used in the calculator. First of all, the length of time the person spent working in a company. It is important to know that only full years spent in the company are taken into consideration. For example, if the person worked in a factory for 5 years and 11 months, for redundancy payout purposes only 5 years of service will be taken into consideration. Another important thing to know is that the number of service years for redundancy payout calculating purposes is limited up to 20 years. Secondly, the age of the person is important. Last but not least, weekly earnings before taxes are also important. There is a limit for weekly income that has to be taken into consideration. Recently current maximum wage was increased and now is fixed at £430 a week. This means that redundancy payout can be based only on weekly earnings that are not higher than £430. If the person gets higher wage, he will be able to calculate his redundancy payout only from that part of the wage that does not exceed £430. This rule is important because the government would be financially incapable to pay people with high wages redundancy payout based on their whole wage. What is more, high earners have more opportunities to save some money for financially difficult times.
The amount of statutory redundancy payout will always be equal to weekly wage the person used to get before becoming redundant. Age at the time of the redundancy and years of service spent at the company influence the time length of the redundancy payout. Basically, the older is the person and the more years of service he spent working for his employer, the longer is the time duration of the statutory redundancy payout. For example, according to calculator, a person that is 40 years old, worked for 5 years in a certain company and his weekly earnings was £400 is entitled to get £400 of statutory redundancy payout for 5 weeks. The person with the same characteristics but ten years older is entitled to get £400 for seven and a half weeks.
It is important to know that employment contract can offer more generous redundancy payment. However, the calculator does not provide the possibility to calculate additional redundancy payout. This additional payout is provided very often by the employers because statutory redundancy payout provides people protection only for short time period. Individual redundancy payment conditions are discussed between employer and employee before signing a job contract. However, the employer cannot offer redundancy payout that is lower than statutory redundancy payout because this action is against the law.