If you're facing redundancy in Ireland, one of your first questions is likely "how much will I get paid?" The good news is that statutory redundancy payments are calculated using a straightforward formula - and you may be entitled to more than you think. This guide walks you through exactly how to calculate your entitlement, with worked examples and insider tips from Richard O'Shea Solicitor, Ireland's specialist redundancy law expert.
The Statutory Redundancy Formula
Under the Redundancy Payments Acts 1967-2014, your statutory redundancy payment is calculated as:
2 weeks' pay × years of service + 1 bonus week
(Subject to maximum €600 per week)
That's it! But the devil is in the details. Let's break down each component to ensure you calculate correctly.
Step 1: Do You Qualify?
To qualify for statutory redundancy in Ireland, you need:
- At least 104 weeks (2 years) continuous service with your employer
- Age 16 or over (no upper age limit)
- Employment in insurable work (most employees qualify)
- Genuine redundancy situation (requirement for your work has diminished or ceased)
If you meet these criteria, you're entitled to statutory redundancy. If your employer disputes your entitlement, contact Richard O'Shea Solicitor immediately.
Step 2: Calculate Your "Normal Weekly Pay"
Your normal weekly pay includes:
✓ Include These:
- Basic salary/wages
- Regular overtime (if part of normal pattern)
- Regular bonuses (contractual and paid regularly)
- Commission (averaged over last 12 months)
- Regular shift allowances
✗ Don't Include:
- One-off bonuses (Christmas, performance)
- Occasional overtime
- Expense reimbursements
- Employer pension contributions
- Benefits in kind (company car, health insurance)
⚠️ The €600 Weekly Cap
Even if you earn €2,000 per week, your statutory redundancy is calculated using only €600 per week maximum. This is why higher earners often negotiate enhanced redundancy packages.
Step 3: Count Your Years of Service
Count every complete year of continuous service. Key points:
- Service is continuous even with breaks of less than 26 weeks
- TUPE transfers preserve continuous service
- Working for related companies may count (if effectively same employer)
- Only complete years count (2 years 11 months = 2 years for calculation)
Worked Examples
Example 1: Standard Calculation
Situation: Sarah has worked for 5 years, earns €500 per week
Calculation:
(2 weeks × 5 years) + 1 bonus week = 11 weeks
11 weeks × €500 = €5,500
Sarah receives €5,500 statutory redundancy payment
Example 2: Above the €600 Cap
Situation: John has worked for 10 years, earns €1,200 per week
Calculation:
(2 weeks × 10 years) + 1 bonus week = 21 weeks
Pay capped at €600: 21 weeks × €600 = €12,600
John receives €12,600, not €25,200 (what it would be at his actual salary). This is where negotiating an enhanced package becomes important.
Example 3: Long Service
Situation: Mary has worked for 20 years, earns €700 per week (capped at €600)
Calculation:
(2 weeks × 20 years) + 1 bonus week = 41 weeks
41 weeks × €600 = €24,600
Mary receives €24,600 statutory payment. Her actual weekly pay of €700 would give €28,700 - she's "losing" €4,100 due to the cap.
Common Calculation Mistakes
Richard O'Shea Solicitor frequently sees employers make these errors:
❌ Forgetting the Bonus Week
Employer calculates 2 weeks × years of service but forgets the +1 bonus week. Always add that extra week!
❌ Wrong Weekly Pay Figure
Excluding regular overtime, commission, or bonuses that should be included in normal weekly pay calculation.
❌ Incorrect Service Calculation
Not counting TUPE transferred service or service with related companies.
Beyond Statutory: Enhanced Packages
Statutory redundancy is the legal minimum. Many employers offer enhanced packages:
- 3 weeks per year (common in large companies)
- 4 weeks per year (generous packages)
- 1 month per year (very generous)
- Based on actual salary (no €600 cap)
- Additional ex gratia payments
If you're offered enhanced redundancy, have it reviewed by Richard O'Shea Solicitor before accepting. Learn more about negotiating enhanced packages.
What If Your Employer Won't Pay?
If your employer is insolvent, refuses to pay, or cannot be located, you can claim directly from the Social Insurance Fund using form RP77. The State will pay your full statutory entitlement. Read our complete guide on claiming redundancy from the Social Insurance Fund.
Unsure About Your Redundancy Calculation?
Get your calculation verified by Richard O'Shea Solicitor. We'll ensure you receive every euro you're entitled to.
Expert Calculation Review