Redundancy
Redundancy pay when your pay varies week to week
With a fixed salary a week’s pay is on your contract; with commission, shifts or no set hours it has to be rebuilt from twelve weeks of payslips.
Checked by Radif Partners · Editorial policy · Method and sources
When your earnings change from week to week, the week’s pay used for statutory redundancy pay is an average of the last 12 complete weeks before a calculation date, under sections 221 to 224 of the Employment Rights Act 1996. Commission and piece rates are included, because the Act treats pay that varies with the work done as part of normal pay. Overtime counts only if your contract guarantees it; voluntary overtime is left out. With no normal working hours, as on a zero-hours employment contract, any week in which you earned nothing is skipped and an earlier paid week is used instead, so the average always covers 12 paid weeks. For redundancy, the calculation date is the day statutory notice would have been given to end on your relevant date, which can put a late pay rise outside the period. GOV.UK says furlough must be ignored: use what you would normally have earned. Whatever the average, a week’s pay is capped at £751.
From 12 weeks of payslips to redundancy pay
Statutory redundancy pay
£5,535
| Average week’s pay | £615.00 |
| Week’s pay used | £615.00 |
| Weeks of pay | 9.0 |
Which twelve weeks
The period ends with the last complete week before the calculation date, or with the week that ends on it. For a redundancy payment, section 226(5) and (6) put the calculation date where statutory minimum notice would have been given had it expired on the relevant date. Where a payment in lieu has triggered the section 145(5) extension, the calculation date is instead the unextended relevant date itself, the actual last day.
A sales adviser who started on 6 February 2017 works three months’ contractual notice to 7 December 2026. Statutory notice for 9 complete years would be 9 weeks, so the calculation date is 5 October 2026. Counting weeks that end on a Saturday, the 12 weeks run from 12 July 2026 to 3 October 2026. A commission spike in November, or a pay rise in December, falls outside them.
Commission and piece rates
With normal working hours and pay that moves with the work done, section 221(3) values a week as the normal hours at the average hourly rate over the 12 weeks. Section 221(4) brings commission into that rate. In practice, when the hours are the same each week, the result equals average weekly pay. A sales adviser on a basic £520 a week who earned £3,480 of commission over the 12 weeks has a week’s pay of £810.00. Acas lists contractual bonuses and commission you are entitled to as part of weekly pay; a purely discretionary bonus is not something you are entitled to.
Overtime: only when the contract fixes it
Section 234 sets the normal working hours. Where overtime starts after a fixed number of hours, those are the normal hours, unless the contract also fixes a higher minimum that the employee must work: then the higher figure counts. Acas puts it simply: weekly pay includes “guaranteed overtime” that the employer must offer and you must work (Acas, Redundancy pay). Voluntary overtime and overtime the employer may offer but need not, however regular, stay outside the redundancy calculation. Where guaranteed overtime is paid at a premium, section 223(3) values those hours at the ordinary rate.
No normal hours: skip the empty weeks
Under section 224, an employee with no normal working hours has a week’s pay equal to average weekly pay over the 12 weeks, but “no account shall be taken of a week in which no remuneration was payable”, and earlier weeks are brought in instead. The table shows thirteen weeks of a delivery driver’s pay, most recent first; the empty third week drops out and the thirteenth is used.
| Week before calculation date | Gross pay | Counted? |
|---|---|---|
| 1 | £612 | Yes |
| 2 | £588 | Yes |
| 3 | £0 | No |
| 4 | £640 | Yes |
| 5 | £702 | Yes |
| 6 | £575 | Yes |
| 7 | £660 | Yes |
| 8 | £598 | Yes |
| 9 | £615 | Yes |
| 10 | £701 | Yes |
| 11 | £556 | Yes |
| 12 | £634 | Yes |
| 13 | £590 | Yes |
At 31 with seven complete years, the driver is owed 7.0 weeks: £4,358. Had the empty week been averaged in, the figure would have been lower; the Act stops a quiet spell before redundancy from cutting the payment.
Furlough, family leave and other reduced-pay weeks
GOV.UK states that if you were paid less than usual because you were on furlough, your statutory redundancy pay is based on what you would have earned normally (Redundancy: your rights). nidirect works through a case where an employee on £300 a week (30 hours at £10) is furloughed for five weeks, then returns for three weeks on 40 hours: the furlough weeks are counted at £300, giving nine weeks at £300 and three at £400, an average of £325.00.
Acas applies the same principle to family-related leave: if you are made redundant while on maternity, paternity, adoption, shared parental, neonatal care or carer’s leave, redundancy pay uses your normal contractual weekly pay, not the reduced pay received during the leave. The maternity leave page covers that case in full.
Part-time and changing hours
A part-time employee’s week’s pay is simply smaller; every year of part-time service still counts as a full year. Someone who cut their hours a few months before redundancy is priced at the new, lower pattern if it is the contract in force on the calculation date. Section 221 looks at that contract, not at an average of past contracts.
Then the cap
Whatever route gives your week’s pay, the result cannot exceed £751 for a relevant date from 6 April 2026. A high month of commission therefore only helps up to that figure. The week’s pay guide compares these rules with the different ones used for holiday pay.