Statutory minimum notice
UK statutory minimum notice on redundancy is:
| Continuous service | Minimum notice |
|---|---|
| Less than 1 month | None |
| 1 month – 2 years | 1 week |
| 2 – 12 years | 1 week per year of service |
| 12+ years | 12 weeks (capped) |
For example: - 3 years of service = 3 weeks minimum notice - 8 years = 8 weeks - 15 years = 12 weeks (cap bites)
The cap at 12 weeks means long-service employees don't get proportionally longer statutory notice. Many enhanced redundancy schemes uncap this — senior staff often have 3- or 6-month contractual notice.
Contractual notice
Your contract may specify longer notice than the statutory minimum. When the contract is more generous, the contractual figure applies. Common contractual notice patterns:
- Junior / entry-level: 1 month (often above statutory for short service)
- Mid-career: 1–3 months
- Management: 3 months
- Senior management / director: 6 months, sometimes 12
If the contract gives less than statutory, statutory still applies. The contract can never lower the minimum.
Three notice modes
1. Working notice
You continue working normally during the notice period at full salary. Tax, NI, pension contributions, and benefits all continue as before. This is the default unless your employer chooses otherwise.
2. Garden leave
You remain employed and paid in full but don't come to work. You can't start a new role until the notice expires. Used where:
- There's a competitive risk in you continuing to access information
- A customer relationship needs careful handover
- Restrictive covenants need a clear enforcement window
Garden leave pay is identical to working notice pay — full salary, full tax, full NI. Pension contributions usually continue. Read more about garden leave →
3. PILON (payment in lieu of notice)
Your employment ends immediately and your employer pays a lump sum equivalent to the notice period. You can start a new job the same day.
Since April 2018, PILON is fully taxable and NI'd — it does not sit inside the £30,000 tax-free redundancy threshold. The legal change closed a loophole where some employers paid PILON tax-free. Now all post-employment notice pay (PENP) is treated as salary. Read about PILON in detail →
Worked example — 6 years' service, £50,000 salary
Service length: 6 years → statutory notice = 6 weeks. Assume contract gives 8 weeks notice.
Whichever is longer applies: 8 weeks notice.
Monthly gross: £50,000 / 12 = £4,166.67 Weekly gross: £50,000 / 52 = £961.54
Total notice pay value: 8 × £961.54 = £7,692.31
Tax (basic rate slice + higher rate slice): - The notice pay is taxed as ordinary salary, layered on top of in-year earnings to date - For a £50k earner mid-year, most of the notice pay sits at 20% Income Tax + 8% NI = 28% combined - Approximate net notice pay: £7,692 × 0.72 = £5,538 net
This is significantly different from statutory redundancy of the same value, which would be tax-free under the £30,000 threshold.
Notice + redundancy combined
A redundancy package typically includes:
- Statutory + enhanced redundancy (occupies the £30,000 tax-free threshold)
- Notice pay (fully taxable + NI)
- Holiday pay accrued (fully taxable + NI)
- Bonus pro-rata, if contractual (fully taxable + NI)
For a £50,000 earner with 6 years' service and 8 weeks contractual notice:
| Element | Gross | Tax/NI | Net |
|---|---|---|---|
| Statutory redundancy | £4,808 | 0 | £4,808 |
| Enhanced (assume 1 wk/yr extra) | £4,808 | 0 | £4,808 |
| Notice pay (8 weeks) | £7,692 | ~£2,154 | £5,538 |
| Holiday pay (3 weeks accrued) | £2,884 | ~£808 | £2,076 |
| Total | £20,192 | ~£2,962 | £17,230 |
The single biggest planning point: the tax-free £30,000 covers redundancy, not the whole package.
Working notice vs garden leave vs PILON — which is better?
Same gross pay all three ways. The differences:
| Factor | Working notice | Garden leave | PILON |
|---|---|---|---|
| Start a new job immediately | No | No | Yes |
| Continue building service | Yes | Yes | No |
| Pension contributions continue | Yes | Usually yes | Lump-sum only |
| Restrictive covenants enforced | Active employment | Active employment | Post-employment |
| Tax timing | Spread over notice | Spread over notice | All in one period |
| Practical control of time | Limited (working) | Free, but employed | Free |
If you have a new job lined up and want to start, PILON is preferable. If you want continued benefits and slow runway, working notice or garden leave is.
Negotiating notice when offered redundancy
A common scenario: HR offers 4 weeks PILON to expedite your departure when your contract specifies 8 weeks notice. Your reasonable counter: "My contract gives 8 weeks; I'd like 8 weeks PILON or 8 weeks worked notice. Not 4."
If the employer wants you out fast, they usually concede the full contractual notice. Don't accept shortened notice as a "courtesy" — it's your contractual right.
When notice can be lost
Limited situations where notice may not be paid:
- Summary dismissal for gross misconduct — your employer terminates immediately for serious cause. No notice owed. Redundancy is not gross misconduct, so this should not apply.
- Settlement agreement waiving notice — if a settlement agreement explicitly waives notice in exchange for a higher ex gratia payment, that's legally enforceable (but rarely beneficial to you).
- Resignation rather than redundancy — you can resign before formal redundancy and end employment by notice-period rules; but you'd lose your statutory redundancy entitlement. Almost never sensible.
Tax-year timing for notice
If your notice period straddles a tax year (5 April), the notice pay is taxed in whichever year each pay date falls. This can sometimes reduce overall tax if a large notice sum spans years and avoids pushing one year's total income into the next band.
Example: £50,000 earner getting £20,000 notice paid in February (in-year additional income) — pushes total to £70,000 for the year, with the slice above £50,270 taxed at 40%. Same £20,000 spread across April–June (split tax years) keeps each year cleaner.
This is sometimes negotiable in a settlement agreement. Worth raising if your package is large enough that tax-year split matters.
Practical checklist
When the offer arrives:
- Note your contractual notice and statutory minimum. Take the longer.
- Verify the offered notice mode — working, garden leave, or PILON. The choice is the employer's, but you can sometimes negotiate.
- Confirm full gross weekly pay is being used. No statutory cap applies to notice pay.
- Check that holiday pay is separate. Accrued unused leave is paid in addition to notice.
- Plan the tax timing. If the notice is sizeable, where it falls in the tax year matters.
For the broader redundancy context, see the redundancy hub. For the tax detail, redundancy tax →.
In short
Notice pay is fully taxable salary for the notice period, never inside the £30,000 tax-free redundancy threshold. The statutory minimum is one week per year of service capped at 12 weeks; your contract may give more, and the longer applies. Working notice, garden leave, and PILON all pay the same gross amount — the choice is about when you're free to move on, not money.