Notice Period & PILON

Calculate the statutory and contractual notice period and the gross PILON value if the contract is terminated immediately.

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All values calculated using standing rule (ERA 1996 s.86) figures.

Are you the employee or the employer?

If your contract says "1 month" enter 4.

£

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How this is calculated

Notice rules are set out in the Employment Rights Act 1996 s.86:

  • Employer to employee: at least 1 week per complete year of service, up to a cap of 12 weeks. None if under 1 month.
  • Employee to employer: at least 1 week (after 1 month service).
  • If the contract gives more, the contract wins. The two are minimums, not alternatives.

PILON (payment in lieu of notice) is the cash equivalent of the notice period, paid up-front rather than worked. Since 6 April 2018 PILON is fully taxable as earnings (income tax + NICs) regardless of any £30,000 redundancy exemption — the £30k tax-free allowance does not extend to PILON.

Sources