The statutory minimum notice period is the legally required minimum notice an employer must give under the Employment Rights Act 1996. The formula is: 1 week per completed year of service, up to a maximum of 12 weeks. Employees with less than 1 month’s service have no statutory entitlement. For employees with at least 1 month but less than 2 years, the minimum is 1 week. From 2 years onwards, add 1 week per year: 2 years = 2 weeks, 5 years = 5 weeks, 12+ years = 12 weeks (capped). Your contract may require longer notice, in which case the contract prevails.
Yes. If you are working your notice period, your employer must continue to pay your full contractual wages and benefits. If your employer puts you on garden leave (asks you to stay home during notice), they must still pay your full salary and maintain your benefits. If they make a PILON payment instead of requiring you to work, that lump sum must cover the wages for the full notice period. The only exception where pay is not owed is summary dismissal for gross misconduct, where the employer can end employment immediately.
PILON is a lump sum payment your employer makes instead of requiring you to work your notice period. For example, if you have 3 months’ notice and your employer wants you to leave immediately, they pay you 3 months’ wages as a PILON. You receive the money but do not work during the notice period. PILON is calculated at your normal gross weekly pay multiplied by the number of notice weeks. It is fully taxable as earnings under PAYE, subject to income tax and National Insurance, since the 2018 PENP rules removed the ability to shelter PILON under the £30,000 termination payment exemption.
Yes. Since 6 April 2018, all PILON — whether paid under a contractual PILON clause or as a termination payment — is taxable as employment income under the Post-Employment Notice Pay (PENP) rules. Your employer deducts income tax and National Insurance via PAYE before paying you. The £30,000 tax-free exemption for termination payments does not apply to the notice pay element. If you also receive an ex gratia payment above PILON (e.g. compensation for loss of office), the first £30,000 of that true termination element may be tax-free, but the PILON itself cannot be sheltered within this exemption.
Yes, but only for gross misconduct — serious behaviour that fundamentally breaches the employment contract. Examples include theft, fraud, assault, or gross insubordination. In these cases, the employer can dismiss immediately (“summary dismissal”) without notice or PILON. However, the employer should still follow a fair procedure (investigate, hold a disciplinary hearing, allow the employee to be accompanied). If they skip a fair process, even a genuine gross misconduct dismissal may be deemed procedurally unfair at an Employment Tribunal. During probation, dismissals without notice are more common but must still respect the statutory 1-week minimum after 1 month’s service.
The statutory minimum notice for 5 completed years of service is 5 weeks. The calculation is 1 week per completed year: 1 year = 1 week, 2 years = 2 weeks, 3 years = 3 weeks, 4 years = 4 weeks, 5 years = 5 weeks. If your contract states a longer period (e.g. 3 months), that contractual period applies instead as it exceeds the statutory minimum. At 5 years on a weekly pay of £600, the statutory notice pay entitlement is 5 × £600 = £3,000 gross. The maximum statutory notice is capped at 12 weeks regardless of service length, though longer contractual periods can and do apply in practice.