Employment Rights Ireland
Redundancy Pay Ireland 2026: How to Calculate It, Tax Rules, and What to Do If Your Employer Won't Pay
The formula is 2 weeks’ pay per year of service plus 1 bonus week, with a €600 weekly cap. Statutory redundancy is fully exempt from income tax. Here is everything you need to know.
Key Facts at a Glance
| Formula | 2 weeks’ gross pay per year of service + 1 bonus week |
|---|---|
| Weekly pay cap | €600 gross (unchanged since 2012) |
| Minimum service | 2 continuous years with the same employer |
| Part-time threshold | Normally at least 8 hours per week |
| Income tax on statutory amount | 100% exempt — no tax owed |
| Basic Exemption (ex-gratia) | €10,160 + €765 per full year of service |
| Increased Exemption | Additional €10,000 if not claimed in last 10 years |
| Notice of redundancy | RP50 form — minimum 2 weeks’ written notice |
| If employer refuses/cannot pay | Form RP77 to the Social Insurance Fund |
| WRC claim deadline | 6 months from date of dispute (extendable to 12 months) |
| Governing legislation | Redundancy Payments Acts 1967–2022 |
How Redundancy Pay Is Calculated
Statutory redundancy pay in Ireland is calculated using a fixed formula set out in the Redundancy Payments Acts. Every qualifying employee receives the same calculation regardless of how much they earn, because the Acts impose a cap on the weekly pay figure used.
The Formula
Redundancy pay = (2 weeks’ pay × years of service) + 1 bonus week
Weekly pay is capped at €600 gross. Service before age 16 is excluded.
What Counts as a Week’s Pay?
A week’s pay is your gross pay — before tax, USC, and PRSI are deducted. It is not your take-home (net) pay. If you work irregular hours, a 52-week average is used. The cap of €600 applies to this gross figure.
What Counts as Continuous Service?
Continuous service is the unbroken period during which you have worked for the same employer. The following do not break continuity:
- Periods of illness or injury leave
- Maternity, paternity, adoptive, and parental leave
- Periods of lay-off or short-time working
- Transfer of a business (your service with the previous employer carries over under TUPE)
- Fixed-term contracts with the same employer renewed consecutively
Service before the age of 16 is excluded from the calculation even if continuity is otherwise maintained.
Part-Time Workers
Part-time employees who normally work at least 8 hours per week qualify for statutory redundancy on the same basis as full-time workers. Their weekly pay for the purpose of the calculation is their actual weekly pay (up to the €600 cap). Years of service are counted in the same way.
Worked Examples
All calculations below use the 2026 formula. The €600 weekly cap applies to gross pay.
Example 1 — 3 years service, €500/week
Weekly pay is €500 (under the €600 cap, so no capping applies).
Calculation: (3 × 2 × €500) + €500 = €3,000 + €500 = €3,500
Example 2 — 5 years service, €700/week (capped at €600)
Weekly pay of €700 is above the cap, so €600 is used.
Calculation: (5 × 2 × €600) + €600 = €6,000 + €600 = €6,600
Example 3 — 10 years service, €400/week
Weekly pay of €400 is under the cap.
Calculation: (10 × 2 × €400) + €400 = €8,000 + €400 = €8,400
Example 4 — 15 years service, €1,000/week (capped at €600)
Weekly pay of €1,000 is well above the cap, so €600 is used.
Calculation: (15 × 2 × €600) + €600 = €18,000 + €600 = €18,600
You can verify your own entitlement using the Redundancy Pay Calculator on this site, which applies the 2026 formula and cap automatically.
Tax Rules on Redundancy Payments
Statutory Redundancy — 100% Tax Free
The amount you are entitled to under the Redundancy Payments Acts is completely exempt from income tax. You do not declare it on a tax return and Revenue does not count it as income. This applies regardless of the size of the statutory payment.
Ex-Gratia Payments — Basic Exemption
When an employer pays more than the statutory minimum as an act of goodwill, the excess is an ex-gratia payment. Ex-gratia payments receive tax relief through one of three methods:
1. Basic Exemption
The first €10,160, plus €765 for each full year of service, is exempt from income tax. This is in addition to your statutory redundancy entitlement (which is already fully exempt).
Example: 10 years of service. Basic Exemption = €10,160 + (10 × €765) = €10,160 + €7,650 = €17,810 of the ex-gratia payment is tax-free.
2. Increased Exemption
If you have not claimed the Increased Exemption in the previous 10 tax years, you can add a further €10,000 to the Basic Exemption, making the total exempt amount €27,810 (for 10 years of service in the example above). This is only available if you have not received a tax-free lump sum from an approved pension scheme.
3. Standard Capital Superannuation Benefit (SCSB)
SCSB is an alternative to the Basic Exemption for employees with long service and higher earnings. The formula is: (1/15) × average annual pay over the last 3 years × years of service, minus the capital value of any pension entitlement. SCSB replaces the Basic Exemption — whichever gives the higher relief is used. It is most beneficial for employees with 15 or more years of service earning above the median.
Jobseeker’s Benefit Impact
Statutory redundancy pay does not affect Jobseeker’s Allowance. If you receive a total lump-sum payment (including ex-gratia) of more than €50,000, Jobseeker’s Benefit may be deferred by up to 9 weeks (6 weeks if you are under 55). Payments at or below €50,000 cause no deferral of Jobseeker’s Benefit.
Time Limits — Do Not Miss This
WRC complaint deadline: 6 months from the date the dispute arose.
This can be extended to 12 months only in exceptional circumstances. The deadline is strictly enforced.
- The clock starts from the date your employer refused to pay, the date you were made redundant, or the date you first formally disputed your entitlement — whichever is earliest.
- Filing a WRC complaint does not prevent you from continuing to negotiate with your employer at the same time.
- There is no filing fee at the WRC. Complaints are made online at workplacerelations.ie.
- If your employer is insolvent, file with both the WRC and submit Form RP77 to the Department of Enterprise — both within 6 months of the dispute date.
Evidence and Documents to Keep
If a dispute arises about your redundancy entitlement, the following documents will be essential at a WRC hearing or when submitting Form RP77:
- Form RP50: The redundancy notice your employer must give you. Keep a signed copy.
- Payslips from the 4 weeks before redundancy: Used to establish your gross weekly pay for the formula.
- P60s (or Employment Detail Summary from myRevenue): Confirm annual earnings and service history.
- Your employment contract: Establishes start date, hours, and terms of employment.
- Written redundancy notice: Any letter or email from your employer confirming the redundancy decision.
- Records of any ex-gratia payment offered: Emails, offer letters, settlement agreements.
- Correspondence about disputes: Any written exchanges in which you raised the issue of unpaid or underpaid redundancy.
What to Do If Your Employer Refuses to Pay
Step 1 — Written demand to employer
Send your employer a formal written request for your statutory redundancy pay. This triggers the legal obligation to respond. Use email so you have a date-stamped record. State that you are making the request under the Redundancy Payments Acts 1967–2022 and that you expect payment within a reasonable time.
Step 2 — Form RP77 (Social Insurance Fund)
If your employer is insolvent or simply refuses to pay, submit Form RP77 to the Department of Enterprise, Trade and Employment. The Social Insurance Fund (SIF) will pay your statutory entitlement on behalf of the employer and then pursue the employer separately for recovery. The SIF only covers the statutory minimum — it does not cover ex-gratia payments.
Step 3 — WRC Complaint
File a complaint with the Workplace Relations Commission online at workplacerelations.ie within 6 months of the dispute. The WRC can make a legally binding determination that your employer owes you a specific amount and order that it be paid. Either party can appeal a WRC determination to the Labour Court within 42 days.
Information Accuracy — This guide has been independently researched and reviewed using official Irish government sources available on the publication date. Government schemes, payment rates, eligibility rules and legislation may change over time. Before making financial, legal or welfare decisions, always confirm the latest information directly with the relevant Irish authority.
Common Mistakes and Misunderstandings
Thinking the €600 cap is net pay
The €600 weekly cap in the formula applies to gross pay before tax. Some employees mistakenly use their take-home pay in the calculation and end up with a lower (incorrect) figure. Always use your gross weekly earnings, capped at €600.
Thinking service resets after a fixed-term contract
If you worked on a series of fixed-term contracts with the same employer and the contracts were continuous (no genuine break), your service accumulates across all of them. An employer cannot reset the redundancy clock by renewing a contract — continuity of service is assessed by looking at the full employment relationship.
Thinking resignation = redundancy entitlement
You are only entitled to statutory redundancy pay if your employer makes your position redundant. If you resign — even if you feel forced to go — you are not automatically entitled to redundancy pay. A constructive dismissal claim is a separate matter and requires the employer’s conduct to have been a fundamental breach of contract.
Waiting too long to file with the WRC
The 6-month deadline is firm. Many employees spend months negotiating informally with their employer and miss the window. File with the WRC immediately if there is any dispute. You can withdraw or settle the complaint later if it is resolved privately.
Not claiming the Basic Exemption on ex-gratia payments
If your employer pays an ex-gratia sum on top of statutory redundancy, you should notify Revenue and claim the Basic Exemption using Form IRC4. Failure to claim means Revenue may treat the full ex-gratia payment as taxable income.
Frequently Asked Questions
Official Sources
Related Employment Rights Guides
Unfair Dismissal
12-month service threshold, fair procedures, WRC claim process, and maximum compensation of 2 years’ pay.
Insolvency Payments Scheme
What employees are entitled to when an employer becomes insolvent — redundancy, notice pay, and arrears.
Statutory Sick Pay
Sick pay entitlements for employees in Ireland — how many days, how much, and who qualifies.
PRSI Contributions
How PRSI works, contribution classes, and which social welfare benefits your PRSI record unlocks.
Legislation: Redundancy Payments Acts 1967–2022. Information on this page reflects the law as in force in 2026. The weekly pay cap of €600 has applied since 1 January 2012. Always verify the current cap and tax thresholds with Revenue or the Department of Enterprise before making a claim.
Information Accuracy — This guide has been independently researched and reviewed using official Irish government sources available on the publication date. Government schemes, payment rates, eligibility rules and legislation may change over time. Before making financial, legal or welfare decisions, always confirm the latest information directly with the relevant Irish authority.