Statutory redundancy pay under £30,000 is not taxable. This could include:
· statutory redundancy pay
· holiday pay
· unpaid wages
· company benefits, for example bonuses
Exempt benefits- providing certain conditions are met “termination payments” in respect of the following are exempt benefits :
· Payment of the employee’s legal costs in relation to a dispute on termination
· Outplacement counseling and related travel costs
· Retraining courses
Redundancy pay is type of compensation that employers are required to pay to employees who have been made redundant (i.e., their job has been terminated because their employer no longer needs their work to be done or because of the closure of the business).
Redundancy pay is calculated based on the employee’s age, length of service, and weekly pay. The statutory minimum amount of redundancy pay is based on a set formula and is capped at 20 years of service.
As of 2021, the statutory redundancy pay is calculated as follows:
· half a week’s pay for each full year you were under 22
· one week’s pay for each full year you were 22 or older, but under 41
· one and half week’s pay for each full year you were 41 or older
Length of service is capped at 20 years. If you were made redundant on or after 6 April 2022, your weekly pay is capped at £571 and the maximum statutory redundancy pay you can get is £17,130. If you were made redundant before 6 April 2022, these amounts will be lower.
It’s important to note that some employers may offer more generous redundancy pay packages than the statutory minimum, so it’s worth checking your employment contract or consulting with your employer to see if this is the case.
Exceptions:
You’re not entitled to statutory redundancy pay if:
· your employer offers to keep you on
· your employer offers you suitable alternative work which you refuse without good reason.
Being dismissed for misconduct does not count as redundancy, so you would not get statutory redundancy pay if this happened. You’re not entitled to statutory redundancy pay if you fall into one or more of the following categories:
· former registered dock workers (covered by other arrangements) and share fishermen
· crown servants, members of the armed forces or police services
· apprentices who are not employees at the end of their training
· a domestic servant who is a member of the employer’s immediate family
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