Annual increases to statutory compensation limits
The Employment Rights (Increase of Limits) Order 2025 will revise the compensation limits for certain tribunal awards and other statutory payments from 6 April 2025. What are the increases?

The Employment Rights (Increase of Limits) Order 2025 will increase the maximum amount of a “week’s pay” from £700 to £719 from 6 April 2025. A “week’s pay” is used to calculate statutory redundancy payments, payments to employees in the event of insolvency and various awards including the unfair dismissal basic and additional awards. Other key increases are:
- the maximum compensatory award for unfair dismissal will rise from £115,115 to £118,223 (there is an additional cap of one year’s salary on the unfair dismissal compensatory award)
- the limit on the daily amount of statutory guarantee pay will rise from £38 to £39
- the minimum basic award for certain unfair dismissals, such as dismissals for reasons of trade union membership or activities, health and safety duties or acting as an employee representative or workforce representative, will rise from £8,533 to £8,763.
The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 6 April 2025. In unfair dismissal claims, that date is the effective date of termination of employment. The limits previously in force will still apply where the effective date of termination was before 6 April 2025.
Related Topics
-
Flat rate scheme: join now or never?
HMRC recently published a report about the advantages and disadvantages of the flat rate scheme for a small business. Could the report lead to the abolition of the scheme or a ban on new users?
-
Accelerate tax relief for the cost of equipment
You’re upgrading your company’s IT equipment as it’s now several years old. Naturally your company will get tax relief for the purchases but what’s the tax position if you sell or scrap the old equipment, and how might you improve it?
-
Opt out of winter fuel payments by 15 September
HMRC has issued new guidance on the winter fuel payments. What do you need to know?