UK Statutory Notice & Pay in Lieu of Notice (PILON)
Under the Employment Rights Act 1996, employees in the UK have a legal right to a minimum notice period before their employment ends. The statutory minimum is: 1 week if employed for 1 month to 2 years; 1 week per year for 2–12 years of service; and a maximum of 12 weeks for 12+ years of service.
Your employment contract may give you a longer notice period than the statutory minimum. You are always entitled to whichever is greater — the statutory minimum or the contractual period.
Notice periods work both ways — employees must give notice when resigning, and employers must give notice when dismissing. These obligations are often different in length.
Employer notice (dismissal): Follows the statutory minimums above (or longer contractual periods). This is what this calculator covers.
Employee notice (resignation): The statutory minimum an employee must give is just 1 week — regardless of length of service — unless the contract specifies longer. Many professional contracts require 1–3 months' employee notice, and senior roles may require 3–6 months. Unlike employer notice, there is no statutory scale linked to years of service for employees resigning.
The asymmetry can surprise people: a 15-year employee may be entitled to 12 weeks' notice from their employer, but only needs to give 1 week's statutory notice themselves (though their contract likely requires more).
Pay in Lieu of Notice is not simply your basic salary for the notice weeks. Since April 2018 and the Finance Act 2017 amendments, PILON must reflect your full "post-employment notice pay" (PENP), which includes:
All PILON payments are subject to income tax and National Insurance (employee and employer contributions) regardless of what the contract says. Before April 2018, contracts with a PILON clause meant the payment was always taxable, but contracts without one could sometimes result in a tax-free payment. The 2017 reforms ended this distinction — all PILON is now taxable.
Holiday pay accrued but not taken at the point of termination must be paid separately from PILON. Holiday accrues throughout the notice period even if you don't work it.
During a notice period — whether you are working it, on garden leave, or receiving PILON — employment rights continue:
Many employment contracts contain restrictive covenants — clauses that restrict what you can do after leaving. Common types include:
Post-termination restrictions are enforceable only if they protect a legitimate business interest and are no wider than reasonably necessary to protect it. Courts will not enforce clauses that are overly broad or effectively prevent the employee from working in their field at all. If your employer repudiates your contract (e.g., by not paying notice), the restrictions may fall away.
When an employer wants to end your employment immediately, they have two main options — and the difference matters:
Garden leave: You remain employed throughout the notice period, receive full pay and benefits, accrue holiday, and remain bound by your contract (including restrictive covenants and confidentiality). You are just not required to come in. Garden leave is often used when the employer wants to enforce post-termination restrictions — because the notice period counts towards the restriction period, effectively running the two simultaneously.
PILON (Pay in Lieu of Notice): Employment ends immediately, and you receive a cash payment instead of working notice. Post-termination restriction periods begin from the date of termination, not from the end of what would have been the notice period. This can mean restrictions are shorter in practice if the employer pays PILON rather than enforcing garden leave.
From an employee's perspective, receiving PILON and being free to start a new job immediately (while the restriction clock also starts earlier) can be preferable to sitting on rt a new job immediately (while the restriction clock also starts earlier) can be preferable to sitting on garden leave unable to work for weeks or months. However, this depends entirely on the contract terms and what the employer is willing to agree to.
If your employer dismisses you without paying your notice period (or paying PILON), this is a breach of contract. You can bring a claim in the Employment Tribunal for wrongful dismissal (breach of contract notice claim), typically alongside any unfair dismissal claim. There is a 3-month time limit from dismissal for bringing a tribunal claim. For higher earners, a county court claim may be more appropriate as the tribunal cap on breach of contract claims is £25,000.
If you have resigned and are serving notice, you are contractually obliged to work the notice period (unless the employer agrees to release you early). Leaving before the notice period ends is a breach of contract. In practice, employers rarely sue employees for this, but it could affect references and outstanding bonuses.
Yes — if you are ill during your notice period and would normally receive statutory sick pay (SSP), you are entitled to receive it. However, employees on notice for 1 week or less are entitled to their full normal pay rather than SSP under section 88 of the Employment Rights Act 1996, provided their contract does not exclude this right.
Statutory notice periods from GOV.UK Notice and redundancy.
Figures are estimates for guidance only. See about this site — how we source data and what these tools can and cannot do.
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