Redundancy can be stressful, but knowing your legal entitlements in Ireland helps ease uncertainty. If your role is made redundant, you may be entitled to a statutory redundancy payment as well as possible additional redundancy packages from your employer. Understanding how much redundancy pay you should get depends on your service length, weekly pay, and age at the time of redundancy.
This comprehensive guide explains redundancy in Ireland, including how much is redundancy payment in ireland to take if you’re facing redundancy.
What Is Redundancy?
Redundancy happens when your employer reduces staff because:
- The business is closing (temporarily or permanently).
- There’s not enough work for the same number of employees.
- Technology or restructuring eliminates certain roles.
- The company needs to cut costs or downsize.
It’s important to note: redundancy is not about performance. It’s about your role being no longer required.
Statutory Redundancy Payment in Ireland
The statutory redundancy scheme sets out the minimum legal entitlement for employees.
- You must have at least 2 years’ continuous service with your employer.
- Your redundancy payment is based on your age, service, and weekly wage.
How Redundancy Payments Are Calculated
The calculation formula for statutory redundancy in Ireland is:
- Two weeks’ pay for every year of service (over the age of 16).
- Plus one additional bonus week.
- Pay is capped at €600 per week (even if your actual weekly earnings are higher).
Example Calculation:
- Age: 40
- Years of Service: 10
- Weekly Wage: €700 (capped at €600 for redundancy purposes)
Calculation:
- 10 years × 2 weeks × €600 = €12,000
- 1 bonus week × €600 = €600
- 1 bonus week × €600 = €600
- Total Statutory Redundancy = €12,600
Eligibility for Redundancy Payment
To qualify for statutory redundancy, you must:
- Be aged 16 or older.
- Have at least 104 weeks (2 years) of continuous employment.
- Be in insurable employment under the Social Welfare system.
- Have been made redundant (not dismissed for misconduct or resignation).
- Be fully up to date with PRSI contributions.
What Is Included in “Weekly Pay”?
Your weekly wage is the average normal earnings over the 13 weeks before redundancy. It includes:
- Basic pay.
- Regular allowances (e.g., shift allowance, on-call pay).
- Bonuses that are guaranteed or contractual.
It does not include:
- Overtime (unless guaranteed).
- Discretionary bonuses.
- Expenses or non-cash perks.
Employer’s Obligations
Employers must:
- Provide redundancy notice in writing.
- Pay the statutory redundancy within the proper timeframe.
- Provide a Form RP50 (Redundancy Payment form).
- Inform employees of their rights, including appealing if they disagree.
If your employer cannot afford redundancy, you may be able to claim through the Social Insurance Fund (via the Department of Social Protection).
Additional (Ex-Gratia) Redundancy Packages
Some employers offer enhanced redundancy packages above the statutory minimum. These may include:
- Extra weeks of pay per year of service.
- Lump-sum goodwill payments.
- Payment in lieu of notice.
- Extended health insurance or outplacement support.
These are not legally required, but can be negotiated, especially in unionised or large companies.
Notice Period for Redundancy
Employees are entitled to minimum notice periods depending on their service length:
- 13 weeks to 2 years → 1 week notice.
- 2–5 years → 2 weeks notice.
- 5–10 years → 4 weeks notice.
- 10–15 years → 6 weeks notice.
- 15+ years → 8 weeks notice.
Your contract may offer longer notice than the statutory minimum.
Tax Treatment of Redundancy Payments
Redundancy payments can have favourable tax treatment in Ireland:
- Statutory redundancy is completely tax-free.
- Ex-gratia (voluntary or additional payments) may also qualify for partial tax relief.
Tax-Free Limits:
- Basic Exemption: €10,160 + €765 per full year of service.
- Increased Exemption: Extra €10,000 (if you haven’t used this exemption in the last 10 years).
- Standard Capital Superannuation Benefit (SCSB): A separate formula often used for larger payments.
Always check with a tax advisor to optimise your redundancy package.
What to Do If You Are Made Redundant
- Check your entitlements: Calculate your redundancy pay using your years of service and weekly wage.
- Request documentation: Ensure you receive your RP50 form and written notice.
- Claim through Social Insurance Fund if needed: If your employer cannot pay, apply via the Department of Social Protection.
- Review tax implications: Speak to a tax advisor about ex-gratia payments.
- Seek advice: Citizens Information and the Workplace Relations Commission (WRC) offer free guidance.
- Consider next steps: Update your CV, register with Intreo for jobseeker’s supports, and explore training opportunities.
Common Questions About Redundancy Pay in Ireland
1. Do part-time workers qualify for redundancy?
Yes—redundancy pay is based on your actual weekly wage, so part-time employees qualify once they have 2 years of service.
2. Can my employer refuse to pay redundancy?
No—if you qualify, it’s a legal obligation. If your employer fails to pay, you can claim through the state.
3. What if I find another job quickly?
You are still entitled to redundancy if your role was genuinely eliminated.
4. Does voluntary redundancy pay the same?
Yes, the statutory formula still applies. However, employers often add enhanced voluntary packages to encourage staff to opt in.
5. Is redundancy the same as severance pay?
Not exactly. Redundancy is a legal entitlement, while severance pay often refers to additional, voluntary payments by the employer.
Tips to Maximise Your Redundancy Package
- Negotiate extras: Employers may agree to additional pay, extended notice, or retraining.
- Check pension rights: Ensure redundancy doesn’t affect your pension benefits.
- Seek union support: Unions can negotiate collective agreements.
- Plan tax efficiently: Use exemptions and SCSB formula to reduce liability.
- Get everything in writing: Document your redundancy agreement and payment terms.
Step-by-Step: Claiming Redundancy in Ireland
- Confirm Eligibility – Check service length, age, and insurable employment status.
- Calculate Entitlement – Use the statutory formula (2 weeks per year + 1 week, capped at €600/week).
- Receive RP50 Form – From your employer.
- Employer Pays You – Within the statutory timeframe.
- Claim from Social Insurance Fund (if necessary) – If employer cannot pay, apply to the Department of Social Protection.
- Review Tax Position – File correctly to avoid overpayment.
- Appeal If Disputed – Contact the WRC if you feel your redundancy was unfair or underpaid.
Practical Example Scenarios
- Worker A
- Age: 25
- Service: 3 years
- Weekly Pay: €500
- Calculation: (3 × 2 × €500) + (€500 bonus) = €3,500 redundancy.
- Age: 25
- Worker B
- Age: 50
- Service: 15 years
- Weekly Pay: €800 (capped at €600)
- Calculation: (15 × 2 × €600) + (€600 bonus) = €18,600 redundancy.
- Age: 50
Redundancy vs Unfair Dismissal
- Redundancy: Role genuinely ceases to exist. You’re entitled to redundancy pay.
- Unfair dismissal: Employer claims redundancy but in reality it’s about performance, discrimination, or dismissal without fair process.
If you believe your redundancy is unfair, you can bring a claim to the Workplace Relations Commission (WRC).
Checklist Before Accepting Redundancy
- ☐ I have checked my statutory redundancy calculation.
- ☐ I received my RP50 form.
- ☐ I know if my employer or the state will pay.
- ☐ I confirmed my redundancy is tax-free.
- ☐ I reviewed additional (ex-gratia) payments.
- ☐ I considered negotiation options.
- ☐ I sought advice (Citizens Information, union, solicitor, or tax advisor).
Final Word
Redundancy in Ireland is a structured process with clear statutory entitlements. The minimum payout is two weeks’ pay per year of service plus one additional week, capped at €600 per week. However, many employers offer enhanced redundancy packages, especially in large or unionised organisations.
If you’re facing redundancy, stay informed, seek advice, and make sure you receive everything you are legally entitled to. A redundancy payment can provide a financial cushion while you plan your next move—whether that’s finding new employment, retraining, or exploring self-employment opportunities.
