Insolvency Pay Calculator

When a UK employer becomes insolvent, employees can claim unpaid wages, accrued holiday pay, notice pay and statutory redundancy, and part of that claim ranks ahead of ordinary creditors. This calculator totals your claim across six insolvency procedures, splits it into preferential and unsecured parts using the statutory rules, and rates your recovery position. It is about money owed to you as an employee; if you want the company’s own financial health tested instead, that is the insolvency calculator for businesses.

Quick Answer

How to use this calculator

Pick the procedure first, then replace the example figures with your own: changing the insolvency type reloads the field labels and a fresh example case for that procedure. Results stay hidden until you click Calculate My Claim.

1. Insolvency type: administration, liquidation, receivership, bankruptcy (of an individual employer), compulsory winding up, or a voluntary arrangement. The type changes the labels and the worked examples loaded into the form. The formulas themselves are the same for all six, because the statutory entitlements do not change with the procedure.
2. Weekly wage, service and age: enter your gross weekly pay, your continuous service (decimals allowed) and your age when employment ended. If you are paid monthly, convert to a weekly figure first; the gross up paycheck calculator shows the gross-to-net relationship if you only know your take-home pay.
3. What you are owed: unpaid wages and notice in weeks, holiday pay as a pounds total. Use your contractual notice if it is longer than the statutory minimum (one week per year of service, up to 12).
4. Read the split, not just the total: the analysis under the figures breaks your claim into preferential and unsecured parts and explains what each part is likely to mean in practice.

Two behaviours of the form are worth knowing. The age field tidies itself as you type (it rounds to whole years and keeps you between 16 and 80), and service is capped at 50 years in the form, although only the most recent 20 complete years can ever count for redundancy. If the wage, service or age is zero, the tool asks you to complete them rather than guessing.

The formulas, including the statutory redundancy method

Three of the four claim parts are simple multiplication. The fourth, redundancy, follows section 162 of the Employment Rights Act 1996 word for word, and it is the part most calculators get wrong.

The counting-back detail is where money hides. A single age factor applied to all your service, the shortcut many tools take, overpays older long-servers and underpays others: a 45-year-old with 10 years of service is owed 12 weeks of pay (4 years at 1.5 weeks and 6 years at 1 week), not the 15 weeks a flat 1.5 factor would suggest. GOV.UK’s guide to your rights if your employer is insolvent states the same bands, and its own redundancy calculator works from exact dates, which is the standard this tool follows using your age and complete years. Part years earn nothing: five years and eleven months of service is five years for redundancy purposes, however unfair that feels.

Payment priority is then graded on the preferential share of the total claim: 80% or more is High Priority, 50% or more Moderate, 20% or more Mixed, under 20% Low, and zero is Unsecured Only. Those bands are this tool’s grading, not a legal category; the legal part is the split itself.

Worked example: an administration case, step by step

The pre-filled case is an employee on £600 a week with 5.5 years of service, leaving at 35, owed 4 weeks of wages, £1,200 of holiday pay and 4 weeks of notice. Here is the full run, verified against the calculator.

A second run shows the age bands biting. Switch to Liquidation and the form loads £750 a week, 8.2 years, age 42, 6 weeks unpaid, £1,800 of holiday and 8 weeks of notice. Unpaid wages are £4,500 and notice pay £6,000. Redundancy uses 8 complete years counted back from 42: the most recent year was worked at 41 or over (1.5 weeks) and the seven before it at ages 34 to 40 (7 weeks), giving 8.5 weeks at £750, which is £6,375. The total is £18,675, the preferential part is £2,600 (£800 plus the £1,800 of holiday pay), 13.9%, rated Low Priority against the estate, which is exactly the situation the government scheme below exists for.

The Redundancy Payments Service: the claim behind the claim

If the estate cannot pay, the Redundancy Payments Service (RPS) pays the statutory parts of your claim from the National Insurance Fund, and then stands in your shoes as a creditor. Its caps are different from the estate claim, and knowing both sets of numbers stops nasty surprises.

Anything above the RPS caps stays as a claim in the insolvency, preferential or unsecured as the split shows. The same logic applies to smaller unpaid amounts from a still-trading employer: the unpaid overtime calculator totals overtime an employer has not paid, which is often the first sign of trouble.

The preferential split, stated plainly

Under Schedule 6 to the Insolvency Act 1986, an employee’s preferential debts are narrow: remuneration owed for the four months before the insolvency date, capped at £800 in total, plus accrued holiday remuneration with no cap. Nothing else an employee is owed is preferential: not notice pay, not redundancy, and not arrears above £800, however recent.

This tool applies that rule directly. It treats your entered unpaid wages as falling inside the four-month window (in practice, arrears claimed at the point of insolvency almost always do) and counts £800 of them, plus all of your holiday pay, as preferential. Earlier versions of calculators in this category often multiplied the £800 limit by the number of claim parts, or treated whole claims as preferential in some procedures, which produced preferential figures several times too high. If a preferential number looks generous on any tool, check it against the £800-plus-holiday rule.

Preferential status only matters if there is money to distribute after secured creditors and the costs of the insolvency itself. Where there is not, the ranking is academic and the RPS route above is the one that pays. While a claim runs its course, usually weeks to months, the salary cut calculator can help you plan a household budget around a reduced or interrupted income.

Claiming in practice

The money follows a set route, and the deadlines are real: most claims must be started within 6 months of your dismissal.

The insolvency practitioner (administrator, liquidator, receiver, supervisor or trustee, depending on the procedure) is your first contact: they confirm the insolvency, issue the CN reference and hold the employment records the RPS checks your claim against. GOV.UK’s claim for redundancy and other money you’re owed service is where the government claim itself is made. Keep payslips, your contract and any dismissal letters; the scheme pays on evidence, not on estimates.

What competing calculators miss

The handful of tools in this niche mostly fail on the same two points: the redundancy bands and the preferential split.

• Brave Calculator’s insolvency pay tool asks you to type in a redundancy figure you have somehow already worked out, then adds the four parts. The hardest part of the claim is left to the reader, for a single procedure, with no preferential split.
• CalculatorsHub’s insolvency pay calculator gets the redundancy bands right and caps weekly pay across every part, which understates the estate claim: caps apply to the RPS payment and to redundancy, not to the wages and notice you are owed by the estate. It also nets off earnings during notice without explaining the two different claims.
• The GOV.UK redundancy calculator is the gold standard for the redundancy part alone, working from exact dates of birth and employment. It stops there: no arrears, no holiday, no notice, no preferential split and no combined claim.
• Dedicated redundancy calculators (PaySlipCheck, redundancycalculator.com and similar) are accurate on redundancy and current on the £751 cap, but redundancy is typically only a third of an insolvency claim.
• Insolvency advice sites (Company Debt, Umbrella.UK, RSM’s employee factsheet) explain the law and the RPS caps well, and this page follows their facts, but none of them lets you compute your own combined claim.
• The gap this page fills: the full four-part claim for six procedures, redundancy done by the statute’s counting-back method, a preferential split that follows Schedule 6 instead of flattering the reader, and the RPS caps set beside the estate claim so both routes are visible at once.

Limits of this estimate

This is an estimate of statutory entitlements, built from the figures you enter, and four limits are worth stating plainly.

• Contractual extras are not counted. An enhanced redundancy scheme in your contract, a longer contractual notice period than you entered, or unpaid pension contributions can all add to a real claim. Pension contributions in particular follow their own route through the practitioner.
• Holiday pay is a lump sum here. The tool trusts your pounds figure. If you only know days owed, convert them at your daily rate first, and remember the RPS pays at most 6 weeks of holiday accrued in the last 12 months.
• Great Britain figures. The £751 cap and the rules described are the GB position. Northern Ireland sets its own weekly cap, and redundancy there also has its own order and guidance.
• Eligibility is assumed. The tool assumes you were an employee with continuous service. Agency workers, contractors and some directors have different routes, and a business transfer (TUPE) can move your claim to the new employer instead.

Frequently asked questions

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