Quick answer
- Redundancy pay is separate from normal wages and notice pay.
- Notice pay covers the notice period, whether worked, paid in lieu or handled another way.
- Final pay may include wages, holiday pay, overtime, bonus or deductions.
- Untaken statutory holiday must usually be paid when employment ends.
- Always check the final payslip, P45, redundancy calculation and payment dates.
When employment ends because of redundancy, the final payment can look confusing because different items are mixed together. The key is to separate each part and check it one by one.
Pay for work done up to the leaving date.
Pay for notice worked or paid in lieu.
Statutory or enhanced redundancy payment.
Pay for accrued untaken holiday.
What redundancy pay covers
Statutory redundancy pay is a legal minimum payment for eligible employees who are made redundant. It is not the same as notice pay or final wages.
Statutory redundancy pay is based on age, full years of service and weekly pay, with a cap on weekly pay and a maximum statutory amount. For redundancies on or after 6 April 2026, weekly pay is capped at £751 and the maximum statutory redundancy pay is £22,530.
statutory redundancy pay:
0.5 week's pay for each full year under age 22
1 week's pay for each full year aged 22 to 40
1.5 weeks' pay for each full year aged 41 or over
maximum service counted = 20 years
weekly pay cap from 6 April 2026 = £751
maximum statutory redundancy pay = £22,530
Estimate statutory redundancy pay
Use age, weekly pay and full years of service to estimate the statutory minimum.
What notice pay covers
Notice is the period between being told employment will end and the actual leaving date. In a redundancy situation, employees must be given at least the statutory minimum notice, or longer if the contract gives more.
Statutory redundancy notice is at least 1 week if employed between 1 month and 2 years, 1 week for each full year if employed between 2 and 12 years, and 12 weeks if employed for 12 years or more.
| Length of service | Minimum notice | Check |
|---|---|---|
| 1 month to less than 2 years | At least 1 week | Contract may give more. |
| 2 to 12 years | 1 week for each full year | Example: 6 full years = 6 weeks. |
| 12 years or more | 12 weeks | Statutory notice is capped. |
Estimate your leaving date
Use start date, notice date and contract terms to estimate notice length.
Working notice, garden leave and pay in lieu
There are different ways notice can be handled. You might work until the end of the notice period, be placed on garden leave, or receive payment in lieu of notice if allowed by the contract or agreed.
Worked notice
You continue working until the leaving date and are paid as normal for that period.
Garden leave
You remain employed and paid during notice, but may be asked not to work or contact clients.
Payment in lieu of notice
The employer pays notice instead of requiring you to work the period.
Contractual notice
Your contract can give more notice than the statutory minimum, but not less.
What can appear on the final payslip?
A final payslip is often different from a normal payslip because it can include leaving-related payments and deductions. Check every line rather than only the net pay figure.
| Final payslip item | What it means | What to check |
|---|---|---|
| Final wages | Pay for days or hours worked up to the leaving date. | Does it match the final working period? |
| Notice pay | Pay for notice worked or paid in lieu. | Does it match statutory or contractual notice? |
| Redundancy pay | Statutory or enhanced redundancy amount. | Is the calculation and cap correct? |
| Holiday pay | Pay for accrued untaken leave, or deduction for overtaken leave. | Does it match accrued entitlement? |
| Bonus or overtime | Any outstanding contractual or agreed payments. | Check bonus rules and cut-off dates. |
| Deductions | Tax, NI, pension, student loans, training costs or other deductions. | Check deductions are lawful and explained. |
Holiday pay when leaving
If you have built up statutory holiday entitlement and have not used it by the time employment ends, the employer must pay it in lieu. If you have taken more holiday than accrued, the employer may try to deduct the difference if the contract allows.
Holiday entitlement depends on the leave year, how much of it has passed, working pattern and holiday already taken. This is why holiday pay is one of the most common final payslip checks.
Estimate accrued holiday
Use the holiday entitlement calculator to estimate statutory holiday for the part-year period.
Tax, National Insurance and redundancy payments
Normal wages, notice pay and holiday pay are usually treated as employment income through payroll. Redundancy payments can have different tax treatment depending on the type and amount of payment.
Statutory redundancy pay and some non-contractual redundancy payments can usually be paid tax-free up to the relevant £30,000 limit, but other payments such as wages, holiday pay and notice pay are normally taxable. Always check the breakdown rather than assuming every leaving payment is treated the same way.
Important: tax treatment can depend on how the payment is structured. Ask payroll for a written breakdown if the payslip is unclear.
P45 and leaving documents
When you leave a job, your employer should give you a P45. This is used by a new employer or benefit provider to understand your pay and tax position for the tax year.
You may also need written redundancy details, a final payslip, holiday calculation, notice calculation, settlement agreement paperwork if relevant, and confirmation of any future payments.
How to check your final pay
Work through the final payment in layers. Do not try to check everything from the final net pay amount alone.
- Confirm the leaving date and final working day.
- Check statutory or contractual notice period.
- Check final wages up to the leaving date.
- Check redundancy pay using age, service and weekly pay.
- Check accrued holiday and any holiday already taken.
- Check overtime, bonus, commission or expenses owed.
- Check deductions such as tax, NI, pension and student loan.
- Ask for a written breakdown if anything is unclear.
Common final pay mistakes
- Confusing redundancy pay and notice pay: they are separate items.
- Ignoring holiday: accrued untaken holiday can add to final pay.
- Only checking net pay: deductions can hide incorrect gross calculations.
- Assuming contract terms match statutory rules: contracts can give more notice or enhanced redundancy.
- Not checking dates: redundancy pay, notice and holiday calculations all depend on dates.
- Missing payment timing: ask when redundancy pay and final pay will be made.
What to do if final pay looks wrong
If the final payslip does not look right, ask the employer or payroll team for a breakdown. Keep copies of the contract, redundancy letter, payslips, holiday record, P45 and any written emails about payment dates.
If the issue is not resolved, you may need advice from Acas, Citizens Advice, a union or an employment adviser. Time limits can apply to employment claims, so do not leave it too long if the amount is significant.
Related glossary terms
These terms help explain redundancy, notice and final payslip calculations.
Redundancy, notice pay and final payslip FAQs
Is redundancy pay the same as notice pay?
No. Redundancy pay compensates eligible employees for redundancy. Notice pay covers the notice period. They are separate items.
When should redundancy pay be paid?
It should usually be paid when employment ends or on the final pay date, unless a different date is agreed in writing.
Should untaken holiday be paid when I leave?
Yes, employers must pay for untaken statutory holiday that has been accrued when employment ends.
Why is my final payslip different from normal?
Final pay can include wages, notice, redundancy, holiday, overtime, bonuses, deductions and payroll adjustments, so it often differs from a normal payslip.