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Is redundancy pay taxed?

The first £30,000 of genuine redundancy pay is usually free of Income Tax; notice pay, holiday pay and bonuses are taxed as earnings.

Your employer: London EV Company (LEVC) announced about 180 job cuts on 9 July 2025.

Notice pay, holiday pay, unpaid wages and bonuses.

This and contractual pay must add up to the total.

For the NI estimate, we assume this is employment earnings.

This estimates Income Tax over the tax year and National Insurance for the payment month, and is not advice. Your final payslip can differ because of your tax code, pay frequency or earnings in that month. Read GOV.UK’s guidance on termination payments.

Common questions

How much redundancy pay is tax-free?

The first combined £30,000 of statutory and additional genuine redundancy or severance pay is usually free of Income Tax.

Is notice pay tax-free?

No. Pay in lieu of notice, holiday pay, unpaid wages and bonuses are taxed as earnings and normally subject to employee National Insurance.

Do I pay National Insurance on redundancy pay?

There is no employee National Insurance on a genuine redundancy payment, including the part above £30,000. The employer may owe Class 1A NI above £30,000.