NHS Redundancy Calculator

You need at least 2 years (104 weeks) of continuous NHS service immediately before your redundancy date. This applies to both NHS contractual and statutory redundancy pay. Continuous service means unbroken employment with one or more NHS organisations. Moving between NHS trusts, ICBs, or other NHS employers without a break exceeding one week (excluding statutory leave) generally maintains continuity.

If you have less than 2 years' service, you won't qualify for redundancy pay, though you may still be entitled to notice pay and any outstanding holiday pay.

The first £30,000 of redundancy pay is completely tax-free — no income tax or National Insurance applies to this portion. Any amount exceeding £30,000 is added to your total income for that tax year and taxed at your marginal rate.

For 2025/26 and 2026/27, the income tax bands are: 20% basic rate (£12,571 to £50,270), 40% higher rate (£50,271 to £125,140), and 45% additional rate (over £125,140). A large redundancy payment may temporarily push you into a higher tax bracket.

Pay in Lieu of Notice (PILON) is usually taxable separately as normal earnings and does not fall within the £30,000 tax-free redundancy allowance. Check your contract for specific PILON terms.

The key differences are substantial. NHS contractual redundancy uses monthly pay (1/12 of salary) per year, allows up to 24 years of service, and caps salary at £80,000 per year. Statutory redundancy uses age-based weekly pay multipliers, caps weekly pay at £751 from April 2026, and allows a maximum of 20 years.

For example, a Band 6 nurse aged 45 with 15 years' service earning £40,000 would receive approximately £50,000 under NHS contractual terms but only about £13,000 under statutory rules — the contractual amount is nearly 4 times higher.

NHS Agenda for Change contractual terms apply to AfC staff in England. Staff in Scotland, Wales, and Northern Ireland may have different contractual arrangements but are always entitled to the statutory minimum.

Yes. If you are aged 55 or over when made redundant, you may be able to access your NHS pension immediately without the usual actuarial reduction for early retirement. This can make the combined value of your redundancy plus pension package substantially more valuable.

The specifics depend on your scheme membership — different rules apply to the 1995 Section, 2008 Section, and 2015 Scheme. The NHSBSA uses specific redundancy factors to calculate capitalised costs.

Before making any decisions, contact NHS Pensions for a personalised quote showing your pension options if made redundant. You can also use our NHS Pension Calculator to estimate your pension value.

MARS (Mutually Agreed Resignation Scheme) is a voluntary separation scheme — it is not redundancy. It is governed by Paragraph 20.18 of the NHS TCS Handbook rather than Section 16 (which covers redundancy). MARS has been primarily offered to staff at NHS England, ICBs, and CSUs undergoing organisational change.

The critical difference is that MARS does not trigger Section 16 redundancy protections, and any service covered by a MARS payment is excluded from future NHS redundancy calculations. If you're being offered a separation package, always clarify whether it's being offered under Section 16 (redundancy) or Paragraph 20.18 (MARS) — the long-term implications differ significantly.

Yes, both significantly affect your calculation. Under Paragraph 16.6, service already taken into account for a previous redundancy or loss of office payment cannot be counted again. For example, if you received redundancy covering 10 years, then returned and worked another 8 years, only the 8 new years count.

Similarly, if you've taken partial retirement and drawn pension benefits on specific years of service, those years are excluded from reckonable service for redundancy purposes. This "clawback" mechanism has been particularly impactful during recent NHS England reorganisations.

Before accepting partial retirement, consider how it may affect future redundancy entitlements. Your HR department can confirm exactly which periods of service are reckonable.

Under standard NHS Agenda for Change terms, the calculation method is identical. Both voluntary and compulsory redundancy use the same formula: 1 month's pay per year of reckonable service, with the same caps and limits.

However, some NHS trusts may offer enhanced packages for voluntary redundancy as an incentive. These enhancements are set locally and could include additional months' pay, higher caps, outplacement support, or extended notice periods. Always check your specific trust's voluntary redundancy terms and get them confirmed in writing before making a decision.