Statutory Rates of Pay Changes April 2020

Annual changes to the statutory rates of pay have come into effect in the last week, which will affect those who are due or seeking redundancy payments. 

A week’s pay: statutory weekly maximum


For statutory calculations of redundancy entitlements, the maximum week’s pay has increased as of 6 April 2020 to £538 for employees made redundant after 6 April 2020.


This means that the maximum weekly salary rate for any statutory redundancy calculations, and the weekly maximum that the Redundancy Payments Service will pay, is £538 per week. If you earned over that, unfortunately this is the maximum you’ll receive. If you earned less than that, your entitlement will be processed at your usual weekly salary rate. Redundancy payments are not subject to tax or National Insurance deductions.


The increase brings the maximum statutory redundancy payment for employees made redundant after 6 April 2020 to £16140; this would be 30 weeks at £538.


The rate for the previous tax year (ending 5 April 2020) was £525. If you were made redundant prior to 6 April 2020, the previous year’s rates will apply.


National Minimum Wage


The National Minimum Wage rate has increased from the 1 April 2020 as follows:


£8.72 per hour for the over 25’s

£8.20 per hour for those aged between 21 – 24

£6.45 per hour for those aged between 18 – 20


If you are a director taking payments through the business at less than National Minimum Wage rate (through PAYE and not including dividend payments) then your weekly salary entitlement for redundancy payments will be calculated using the National Minimum Wage rate.


If you have any queries about whether you are due a redundancy payment, and how much this would be, get in touch with us directly today – We’ll quickly provide you with a free assessment and estimate of what you could be entitled to.