Voluntary redundancy net figure help

ceep88

hello. I have put myself forward recently for voluntary redundancy but my employer will not tell me what the final net amount will be after tax and NI and suggested I work it out myself. Yay! Wondering if it’s even worth accepting. Can anyone help? Even if it’s a rough estimate.
The total redundancy payout is £70,216.14. Split as follows:

Compensation: £51,838.98

PILON : £8,086.68

Maternity: £10,290.48

The payout is due as a lump sum at the end of May 2026. my annual salary is £38,508.96 and I will have received just 1 monthly payment (30th April) of the new tax year before this payment.(approx £2440 net, £2900ish gross) I am currently in the 20% tax bracket. I will not receive another payment this year as I will be taking time out to look after my newborn until the new tax year starts in 2027. (Hence the mat leave payment)
I understand £30k of the compensation is tax free and the rest is subject to tax. I also know that the maternity and PILON are subject to tax and NI but what I can’t work out is how much roughly I would receive of the total payout, how much falls into the 20% and 40% brackets.

Any help would be greatly appreciated. It would be nice if companies could work this out for you in advance of accepting instead of leaving you in a state of worry! Thank you.

El_Torro

Remember that the first £30k is tax free, so only just over £40k is taxable. Since you will have only earnt £3k so far this tax year you should remain in the 20% tax bracket, especially if you don't live in Scotland.

Of course if you get a new job this tax year you might become a 40% tax payer as a result.

MouldyOldDough

https://forums.moneysavingexpert.com/discussion/6664449/voluntary-redundancy-net-figure-help

Your total taxable income this tax year will be the £70,216 + £2900 minus £30,000 = £43,000 so you will pay a little over £10,000 in income tax leaving your redundancy payment as around £60,000 (all +/- a bit)

You will pay tax at 40% on £10k of your payment - the rest at 20%

0% on income up to £12,570, 20% on income between £12,571 and £50,270, 40% on income between £50,271 and £125,140, and 45% on income over £125,140

How many years do you have behind you ?

ceep88

https://forums.moneysavingexpert.com/discussion/comment/81965626#Comment_81965626

thank you for this. As of March just gone I have 19 years length of service.

chrisbur

" I will not receive another payment this year as I will be taking time out to look after my newborn until the new tax year starts in 2027 "

https://www.gov.uk/guidance/claim-back-income-tax-when-youve-stopped-working

Details here for anyone leaving emplyment and not planning to have income for rest of year.