Statutory redundancy in Ireland has a simple formula and a ceiling that reshapes it for anyone earning above a modest salary.
Two weeks' gross pay for every year of service, plus one additional bonus week.
Both the two weeks and the bonus week are subject to the ceiling.
The €600 ceiling
Weekly pay used in the calculation is capped at €600 per week — equivalent to €31,200 a year.
If you earn more than that, the calculation still uses €600. Higher earners therefore receive proportionately less than their actual wage would suggest.
A worked example
Ten years of service at €600 or more per week: (10 × 2) + 1 = 21 weeks' pay, which is €12,600.
No cap on years
There is no limit on years of service — the weekly cap is the only ceiling. Part years count pro rata.
Who qualifies
- 104 weeks (2 years) of continuous service with the same employer
- Aged 16 or over
- An employee in fully insurable employment — Class A PRSI
- Genuinely made redundant, not dismissed for misconduct or having resigned
Part-time workers who meet the two-year threshold are equally entitled.
Self-employed contractors, or those under a "contract for services", usually do not qualify.
It is tax-free
The statutory payment is fully tax-free.
Ex-gratia top-ups above the statutory amount may be partially taxable, with a basic exemption of €10,160 plus €765 per year of service. The lifetime tax-free cap on redundancy payments is €200,000.
Enhanced redundancy
Many employers offer more than the statutory minimum, particularly in settlements. It is not set by law and is at the employer's discretion.
In senior cases, the statutory amount may represent only a small percentage of the total termination payment.
You cannot contract out
You cannot contract out of statutory redundancy. Do not sign a waiver of rights without independent legal advice.