Statutory redundancy in Ireland: the calculation explained step by step

The statutory redundancy sum looks simple on paper: two weeks' pay for every year, plus one week, capped at €600 a week. In practice people lose money on the detail. Which date is the start date? Does the year you were on maternity leave count? Is your pay the hours you worked last month or the hours in your contract? This guide takes the formula apart so you can check the figure your employer gives you.

Step one: do you qualify?

The Redundancy Payments Acts 1967 to 2014 set three conditions.

1. 104 weeks' continuous service with the employer. That is two years, counted in weeks. If you fall short by even a week, there is no statutory entitlement, although a contractual or ex gratia payment is still possible.
2. Aged 16 or over. Service before your 16th birthday does not count, and the Department counts your service from that birthday if you started younger.
3. Insurable employment. You were in employment that is fully insurable under the Social Welfare Acts, which covers almost every employee paying Class A PRSI.

You must also have been dismissed by reason of redundancy, laid off or kept on short time for the trigger period, or have left in response to a lay-off or short-time notice. The lead guide explains what counts as a redundancy.

Step two: count your service

Your service runs from your start date to your termination date, which is the date your notice ends, not the date you were told. If your employer pays you in lieu of notice, the notice period still counts towards service for the calculation.

Complete years count in full. The days beyond the last complete year are divided by 365 and added as a fraction of a year. This is the method the Department of Social Protection's own calculator uses; the exact rule sits in Schedule 3 of the 1967 Act and is marked for verification against the Act in this site's rules. So:

Use your written statement of terms or your first payslip for the start date, and the written notice of redundancy for the end date. If your employer uses a later start date than you remember, ask why in writing.

Step three: apply the formula

The sum is:

• two weeks' pay for every reckonable year, plus
• one bonus week of pay.

In weeks, that is (years × 2) + 1. Then multiply by your capped weekly pay.

A worked example with a clean part year: 4 years and 73 days of service at €520 a week.

• Reckonable years: 4 + 73 ÷ 365 = 4.2.
• Weeks: 4.2 × 2 + 1 = 9.4 weeks.
• Weekly pay: €520, below the cap, so it stands.
• Lump sum: 9.4 × €520 = €4,888.

The same person on €900 a week would be capped at €600: 9.4 × €600 = €5,640.

Step four: the €600 cap

Weekly pay for the statutory calculation is capped at €600. The cap has been at that level since 1 January 2005 and had not changed at 13 October 2026; any change would be tracked on /changes. If you earn €600 or less a week, your actual pay is used. If you earn more, every week in the formula is worth €600.

The cap bites hard for higher earners. Someone on €1,500 a week with 10 years' service gets 21 weeks × €600 = €12,600 by statute, not 21 × €1,500 = €31,500. The difference is only recoverable if the contract or an ex gratia offer provides for it, and the tax guide explains how a payment above the statutory sum is taxed.

What counts as a week's pay

Your weekly pay for the calculation is your normal weekly pay at the date of termination, before tax, including regular overtime and any regular allowances. The Department's guidance treats it as your gross weekly wage, plus average regular overtime, plus benefits in kind.

Where your hours vary, the employer should use an average. If you are paid monthly, divide the annual figure by 52: a monthly salary of €3,000 is €36,000 a year, which is €692.31 a week, which is then capped at €600.

If you were on reduced pay at the end, for example on short time or on sick leave at a lower rate, the calculation is based on your normal pay, not the reduced pay. The guide on redundancy on maternity or sick leave covers that point.

Part-time workers

Part-time employees qualify on exactly the same terms as full-timers: 104 weeks' continuous service, the same formula, the same cap. The only difference is that your weekly pay reflects your part-time hours, so the sum is smaller in proportion. Someone working 20 hours a week at €15 an hour has a weekly pay of €300; with 6 years' service the sum is 13 weeks × €300 = €3,900.

If you moved from full-time to part-time during your employment, the calculation uses your pay at the date of termination. If the move to part-time was recent and was imposed rather than agreed, ask whether the employer's own scheme or the circumstances of the change give you a better basis, and take advice if the difference is large.

Breaks in service and what counts as continuous

Continuous service means service with the same employer without a break that ends the employment. The following do not break continuity under the Acts:

• annual leave, public holidays and other paid leave;
• sick leave;
• maternity, paternity, parent's, parental, carer's and adoptive leave;
• lay-off or short time;
• a strike or lock-out;
• a dismissal followed by reinstatement or re-engagement;
• a transfer of the business to a new owner under the TUPE Regulations, where your service transfers with you.

Some absences count as continuous but not as reckonable: the continuity is kept but the weeks are not added to the total. The main examples in the Acts are periods of lay-off and some longer absences; the detail is in Schedule 3 of the 1967 Act and is worth checking against the Act if a long lay-off sits in your service history.

A genuine break, where you resigned or were dismissed and were later rehired, restarts the clock from the second start date. A fixed-term contract followed by another with the same employer is usually continuous, and non-renewal of a fixed-term contract after at least 104 weeks can itself be a redundancy.

Who pays, and when

The employer pays the statutory sum. It should be paid on your termination date or shortly after it, and the employer should give you a written statement of how it was worked out. The old RP50 paper form is gone: you do not need a form from your employer to be paid, and the Department no longer processes individual redundancies on paper.

If the employer is insolvent and cannot pay, the Department pays the statutory sum from the Social Insurance Fund on the employer's or the liquidator's application, and the Department becomes a creditor of the employer for the amount. The insolvency guide explains the route and the timescales.

If the employer can pay and will not, or pays less than the formula gives, you can complain to the WRC under the Redundancy Payments Acts and the adjudicator can order the correct sum. Treat the general WRC rule as your deadline: 6 months from the date of dismissal, extendable to 12 for reasonable cause.

Tax on the statutory sum

The statutory lump sum is free of income tax, USC and PRSI, whatever its size. It does not appear in your taxable pay and does not use up any of your tax-free exemptions. Only an ex gratia payment above it can be taxed, and the tax guide walks through the Basic Exemption of €10,160 plus €765 per complete year, the Increased Exemption of up to €10,000 more, the SCSB formula and the €200,000 lifetime cap.

What else is in your final pay

The statutory sum sits alongside, not instead of, your other entitlements on leaving:

• Minimum notice of one to eight weeks depending on service, or pay in lieu; see redundancy notice periods.
• Accrued annual leave not taken, paid in full.
• A public holiday that falls within a week of your leaving.
• Any contractual redundancy scheme, which cannot be less than the statutory sum and is often more.

A checklist before you accept the figure

• Is the start date right? Check it against your first payslip or your written statement of terms.
• Is the end date the date your notice ends, not the date you were told?
• Has the employer used your normal weekly pay, including regular overtime?
• Has it applied the €600 cap correctly, and only to the statutory part?
• Have part years been counted as days over 365?
• Does the figure include your notice, holiday pay and any contractual top-up as separate lines?

Where this leaves you

Put your own start date, end date and weekly pay into the redundancy calculator. It applies the formula above, the €600 cap and the days-over-365 rule, and shows the notice you are owed alongside. If your employer's figure is lower and the explanation does not hold up, or the question is whether the redundancy is genuine at all, a solicitor can look at the dates and the documents with you; the enquiry page explains how that works on this site.