Redundancy Payments Scheme Gross Weekly Wage

The wage used to calculate payments under the Redundancy Payments Scheme is outlined in the Redundancy Payments Acts. The department uses the following guidelines to assess the wage submitted on applications.

If the wage does not vary from week to week then the wage used in the redundancy calculation will be -

• Gross earnings for normal working hours at the date of termination of employment.
• It will include an average of any regular bonus or allowance.
• For monthly paid workers the normal monthly wage is divided by 4.33 to calculate the weekly wage.

If an employee does not have regular hours or wages then an average of the last 52 weeks worked is used.

Earnings from overtime can be included in the calculation of normal weekly wages as follows:

• The overtime for the 13 weeks before date of termination of employment is excluded.
• Weekly overtime will be the average overtime during the previous 26 weeks worked (excluding the 13 weeks immediately before date of termination).
• If there were any weeks in the 26 week period not worked then the 26 week period may be extended back for every week not worked.
• This average overtime is added to the normal weekly wage for the purposes of the claim.

Shift worker/piece worker

• If the employee was a shift worker or a piece worker then the same calculation for overtime will be used. Average earnings in the 26 weeks excluding the 13 weeks immediately before date of termination.

• Short time is defined in the Redundancy Payments Act as a reduction in hours to less than half of normal weekly hours or less than half of normal weekly pay.
• If the employee was put on compulsory short time in the year before date of termination, the redundancy payment will be calculated using a full weeks pay.

• If the employee was put on reduced hours but it is not short time as defined in the Redundancy Payments Act then information will be required to support the use of the full-time wage for the calculation.

• Where an employee requested a reduction in hours, the job sharing pay/reduced hours is used for the calculation.

If an employee was earning less than the minimum wage they may be entitled to payment based on the minimum wage. The exceptions to this include:

• if a portion of the wage calculation included a period where the employee was less than 20 years of age, the minimum wage used is a lower rate.

• categories of employment that are not included under the National Minimum Wage Act, such as apprenticeships.

Where the department’s calculation does not match the application form additional information is required. This may be the case if an employee was on parental leave, adoptive leave or carer’s leave.

Redundancy Payments main scheme page