Explaining your redundancy payments

If you’ve been made redundant and your employer is insolvent, you can apply to the Insolvency Service for the money you’re owed.

To apply, you must complete the online application. We’ll then assess your claim and pay you the money you’re entitled to.

We make separate payments for the different elements of your claim:

We’ll send you a letter each time we make a payment. This means you may get several different letters from us.

This guide explains the types of payment you might be entitled to and how we work out how much we should pay you.

If you were made redundant on or after 6 April 2026, your weekly pay is capped at £751.

The lower rate of £719 will apply to calculations before this date.

The maximum total of statutory redundancy payments you can get is £22,530.

If you are owed more than the maximum we can pay, you can register as a creditor in the insolvency for any outstanding money you’re owed.

We deduct National Insurance (NI) from any payments made for the different elements.

Payments calculated on or after 6 April 2024, the NI deducted will be at a rate of 8% on payments above the primary threshold.

We calculate your payments based on your weekly pay. If you’re not paid weekly, we will calculate what you would be paid for a working week.

Any overtime, commission or bonus pay you earn may be taken into consideration. This depends on what is in your contract of employment.

If you are paid hourly, we’ll calculate your weekly pay based on your hourly rate multiplied by the number of hours you worked per week.

For redundancy pay, arrears of pay and notice pay, if your number of hours worked per week varied, we will take an average across 12 weeks.

For holiday pay, if your number of hours worked per week varied, we will take an average over 52 weeks.

If you do not think your weekly pay has been calculated correctly, contact the insolvency practitioner dealing with your redundancy.