Redundancy Lump Sum Tax Calculator (Ireland)
Estimate tax on an Irish redundancy lump sum: statutory redundancy, the Basic Exemption, the Increased Exemption and SCSB (a formula from your pay and years of service) side by side.
Calculator
EXAMPLE The employer pays a €43,308.00 package; €41,118.00 of it is tax-free. Swap in your own numbers below.
In plain terms: statutory redundancy is the legal minimum an employer owes an employee whose job disappears — always completely tax-free. Anything extra (an ex-gratia lump sum) can also be partly or fully tax-free under whichever of three schemes works out highest: the Basic Exemption, the Increased Exemption, or SCSB (Standard Capital Superannuation Benefit — a formula from pay and years of service).
EXAMPLETax-free total (2026 rules) — prefilled numbers, swap in your own in the form
€41,118.00 of €43,308.00
Statutory €13,308.00 (always tax-free) + €27,810.00 of the lump sum covered by the Increased Exemption. The remaining €2,190.00 is taxable — roughly €1,051.20 at the rates selected.
Tax-free total is not the same as what the example keeps: after the €1,051.20 tax on the rest, €42,256.80 of the €43,308.00 package is left — the total kept after tax in section 3.
Who pays: the employer. If the employer cannot pay — insolvency, for example — the statutory €13,308.00 can still come from the State's Redundancy Payment Scheme: the same amount, a different payer. An ex-gratia lump sum is not covered by that scheme.
1 · Statutory redundancy
€13,308.00 = 22.18 weeks × €600.00 (the example's weekly pay is over the €600 cap, so the cap applies)
22.18 = 2 weeks × 10.59 years + 1 bonus week. Completely tax-free — no income tax, no USC (Universal Social Charge) and no PRSI (Pay Related Social Insurance) — and it does not use up any of the exemptions below.
Who hands this over: the employer. If the employer cannot pay it — insolvency, or the business simply closing — the same €13,308.00 can be claimed from the State's Redundancy Payment Scheme, run by the Department of Social Protection: the same amount, a different payer. That scheme covers the statutory amount only, not an ex-gratia lump sum, and how to apply is on the gov.ie page listed under Sources.
Service between the two dates in the form is counted twice, under different rules: the STATUTORY amount uses 10 complete years plus 216 days — 10.59 years, precise to the day — while the TAX exemptions use 10 complete years (part-years dropped entirely). Both figures come from the same two dates, counting the first and the last day of employment as worked days.
What one more complete year is worth
The tax exemptions count only COMPLETE years, so the part-year at the end is dropped. Working on to 28/02/2027 — 151 more days — would complete 11 years instead of 10. Same pay, same lump sum, same 2026 rules; only the last day of employment moves.
| What changes | Last day 30/09/2026 | Last day 28/02/2027 | Difference |
|---|---|---|---|
| Complete years the tax exemptions count | 10 | 11 | +1 |
| Statutory redundancy | €13,308.00 | €13,812.00 | +€504.00 |
| Relief that wins on the lump sum | Increased Exemption €27,810.00 | Increased Exemption €28,575.00 | +€765.00 |
| Taxable part of the lump sum | €2,190.00 | €1,425.00 | −€765.00 |
| Total kept after tax | €42,256.80 | €43,128.00 | +€871.20 |
Leaving on 28/02/2027 instead would leave about €871.20 more after tax (2.1% more), for 151 more days of work. A leaving date is not always the employee's to choose and the redundancy still has to be genuine — but if the date can move, that is the size of it. Both columns price 2026 rules; a later Budget can change them.
2 · Tax relief on the ex-gratia lump sum — three schemes compared
Revenue grants the HIGHEST one the employee qualifies for — they never stack. Scheme amounts are shown to the nearest euro; the summary below keeps the cents.
| Scheme | How it is worked out | Exemption |
|---|---|---|
| Basic Exemption | €10,160 + €765 × 10 complete years | €17,810 |
| Increased Exemption ← highest | Basic + €10,000 addition | €27,810 |
| SCSB | (€36,400 average gross pay × 10 years ÷ 15) − €0 pension lump sum Average gross pay worked out from the example's weekly pay × 52 — the employee's real 3-year average (before tax) goes under Pay history if it differs. | €24,267 |
3 · What the example keeps
| Statutory redundancy (tax-free) From the employer — or from the State's Redundancy Payment Scheme if the employer cannot pay. | €13,308.00 |
|---|---|
| Lump sum covered by the Increased Exemption | €27,810.00 |
| Taxable part of the lump sum | €2,190.00 |
| Income tax at 40% | −€876.00 |
| USC (Universal Social Charge) at 8% | −€175.20 |
| PRSI (Pay Related Social Insurance) on the lump sum | €0.00 |
| Example total kept after tax — from the employer | €42,256.80 |
That is about 97.6% of the whole package kept after tax.
Tax estimated at the marginal rates currently applied (40% income tax + 8% USC — change them under Advanced options). A marginal rate is what the last euro of income for the year is charged at. No PRSI is due on a termination lump sum. Payroll will apply the exact bands and credits — expect the final payslip figure to differ somewhat. With about €38,590 of income for the year — under the €44,000 single-person cut-off (the income level where the 40% rate starts) — the example's marginalincome-tax rate is likely 20%, not 40%. Based on the yearly pay entered here plus this taxable part (about €38,590 for the year), the example's marginal USC band is likely 3%.
Enter your own numbers in the form and this section will show how to check the result against the final payslip.
Assumptions and things to know
- Statutory eligibility assumes fully insurable employment (PRSI Class A or similar) and a genuine redundancy — the job ceasing to exist. Self-employment (PRSI Class S) is not fully insurable employment, so statutory redundancy does not cover it. There is no upper age limit since 2007. The Act also sets a minimum age of 16, and service before that birthday does not count — this calculator has no date-of-birth field, so it checks neither: every day between the two dates is counted.
- Service years assume continuous employment between the two dates in the form. Any non-reckonable absence days entered in the form shorten the STATUTORY service only: the tax exemptions keep every complete year between the two dates, because the non-reckonable list is a redundancy-scheme rule, not a Revenue one. Which absences count is on the gov.ie page linked under Sources.
- If the employer cannot pay the statutory amount (for example, insolvency), it can still be paid through the State's Redundancy Payment Scheme (Department of Social Protection) — the same amount, a different payer. The gov.ie source under Sources covers how to apply.
- CONTRACTUAL pay in lieu of notice, holiday pay, arrears and bonuses are taxed as normal pay — outside this calculator. NON-contractual pay in lieu of notice can form part of the ex-gratia lump sum.
- Waiving a pension lump sum: signing an irrevocable waiver sets the pension figure here to 0, which can restore the Increased addition and raise SCSB — a real trade-off that needs professional advice.
- Top Slicing Relief was abolished — the taxable part is simply taxed at the marginal rate (the rate the last euro of income is charged at). Ignore older guides that still mention it.
- The €200,000 lifetime cap covers all Basic / Increased / SCSB exemptions an employee ever uses, across employers. Statutory redundancy does not count against it.
Estimates only — not professional advice.
How this calculator works
Statutory redundancy is 2 weeks' pay per year of service plus 1 bonus week, capped at €600 a week — with your service counted precisely to the day, and only if you have at least 104 weeks (2 years) of continuous service. The tax side counts your service a SECOND way — complete years only — and compares three reliefs on any ex-gratia lump sum: the Basic Exemption (€10,160 + €765 per complete year), the Increased Exemption (up to €10,000 more, reduced by any pension tax-free lump sum), and SCSB (average pay × years ÷ 15, minus that pension lump sum). You get the highest one, within a €200,000 lifetime limit; what is left over is taxed as income (plus USC, but no PRSI). Every figure is read from a versioned data file assembled from the official publications below, and the engine must reproduce Revenue's and the DSP's published worked examples in its test suite before any deploy.
Sources
Key official sources for the figures on this page — the Sources page lists every statutory value with its effective and retrieval dates.