How to Work Out Your Redundancy Pay
If you are trying to calculate your redundancy entitlement, it is important to first understand the definition of redundancy. Unsure if your situation qualifies? Read our guide on Redundancy Meaning & Rights in Ireland.
1. Statutory Redundancy (Tax-Free)
The statutory lump sum is guaranteed by law. It is calculated as:
- Two weeks' pay per year of service (capped at €600/week).
- Plus one bonus week's pay (capped at €600).
How to Calculate Your Redundancy
When you want to calculate your redundancy manually, remember the statutory cap. The government caps the weekly wage used for this calculation at €600. Even if you earn €1,000 a week, the statutory formula uses €600. Our tool automatically applies this limit for you.
2. Ex-Gratia Payments (Taxable Rules)
Any amount above the statutory minimum is known as an Ex-Gratia payment. This is taxable, but you can work out your tax-free allowance using the Basic Exemption:
- €10,160 (fixed base amount)
- Plus €765 for each complete year of service.
If your Ex-Gratia payment is lower than this exemption limit, you likely won't pay tax on it.
Common Questions
How do I calculate my redundancy in Ireland?
To calculate your statutory redundancy: Take 2 weeks' pay for every year of service (capped at €600/week) and add one bonus week's pay. Our calculator handles this logic automatically.
Is my redundancy pay taxable?
Statutory redundancy is 100% tax-free. However, any amount above the statutory limit (Ex-Gratia payment) may be taxable depending on your Basic Exemption (€10,160 + €765 per year of service).
How to work out redundancy pay exemptions?
You can work out your tax-free exemption using the Basic Exemption rule: €10,160 plus €765 for each full year of service. This amount can be received tax-free on top of your statutory lump sum.