Your rights if your employer is insolvent

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What you can get

What money you’re entitled to depends on:

  • how long you were employed
  • what was in your employment contract
  • your age

Payments are capped.

Redundancy pay

You’re normally entitled to redundancy pay if you:

You’ll get:

  • half a week’s pay for each full year you were employed and under 22 years old
  • one week’s pay for each full year you were employed and between 22 and 40 years old
  • one and a half week’s pay for each full year you were employed and 41 or older

Redundancy payments are capped at £700 a week (£643 if you were made redundant before 6 April 2024).

You can get a payment for a maximum of 20 years that you were employed at the business.

Calculate your redundancy pay.

Wages and other money you’re owed

You can apply for unpaid wages and other money you’re owed by your employer, for example bonuses, overtime and commission.

You’re only entitled to money that’s in your employment contract.

You’ll get up to 8 weeks of money you’re owed. It counts as a week even if you’re only owed money for a few days.

Example

If you’re owed £30 of overtime per week for the last 10 weeks, you’ll get £240 (£30 x 8 weeks).

Payments for wages and other money you’re owed are capped at £700 a week (£643 if you were made redundant before 6 April 2024).

You pay income tax and National Insurance when you get unpaid wages and other money you’re owed. You might be able to claim a tax refund if you’ve paid too much.

Holiday pay

You can get paid for:

  • holiday days owed that you did not take (‘holiday pay accrued’)
  • holiday days you took but were not paid for (‘holiday pay taken’)

You’re only paid for holidays you took or accrued in the 12 months before your employer became insolvent.

You’ll only get payments for up to 6 weeks of holiday days. Holiday pay is capped at £700 a week (£643 per week if your employer went insolvent before 6 April 2024).

You pay income tax and National Insurance on your holiday payment. You might be able to claim a tax refund if you’ve paid too much.

Statutory notice pay

You’re entitled to a paid notice period when you’re made redundant, even if it is not in your contract.

You can claim for statutory notice pay if you:

  • did not work a notice period
  • worked some of your notice period
  • worked an unpaid notice period

Your statutory notice pay is worked out as one week’s notice for every year you were employed, up to a maximum of twelve weeks.

Payments are capped at £700 a week (£643 if you were made redundant before 6 April 2024).

Pension contributions

Contact the insolvency practitioner or official receiver if you’re missing contributions to your pension.

View a printable version of the whole guide

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