Owed Notice Pay?

Check you've been paid the right notice

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When your job ends, you're usually entitled to notice, or to be paid instead (or 'in lieu') of working it.

Employers often get this wrong. They pay too little, leave out benefits, or call something gross misconduct (behaviour serious enough to justify instant dismissal) to avoid paying notice at all. Here's how to check what you're owed.

How much notice are you entitled to?

Your notice period is determined by two things: the law and your contract. You get whichever amount of notice is longer.

The legal minimum notice period (called 'statutory' notice) is:

• one week, if you've worked there for at least one month but less than two years
• one week for each complete year, if you've worked there for two years or more
• up to a maximum of 12 weeks.

Your contract may give you a longer notice period, such as one month or three months. Check your contract or your written statement of terms (the document setting out your pay, hours and notice, which your employer must give you).

What is pay in lieu of notice (PILON)?

Pay in lieu of notice means your employer ends your job straight away and pays you for the notice period instead of having you work it.

If your contract has a PILON clause, your employer can do this, and the clause sets out what you get. Often that's basic salary only.

If there's no PILON clause in your contract, ending your job without notice is a breach of contract (breaking the terms of your contract).

The payment is then compensation for that breach. It should usually include everything you'd have received during your notice, including benefits such as pension contributions, a company car or health insurance.

Common mistakes your employer may make

Employers often make mistakes in calculating your PILON, such as:

• Giving you the wrong notice period. Paying the legal minimum when your contract gives you more.
• Missing out some kinds of pay. Leaving out regular overtime, commission or allowances you were entitled to.
• Missing benefits. Ignoring pension contributions and other benefits when there's no PILON clause.
• Holiday pay. Not paying for holiday you built up during your notice, or holiday you hadn't taken when you left.
• Giving it a gross misconduct label. Sacking you without notice when what happened wasn't serious enough to justify it. That may be a wrongful dismissal claim.

How notice pay is taxed

Notice pay and PILON are taxed as earnings, so income tax and National Insurance are taken off, just like with normal pay. This is true even if your employer calls it compensation.

A genuine termination payment is different. An example is an extra sum in a settlement agreement, also known as an 'ex gratia' payment. The first £30,000 of that can be tax-free.

What to do if you've been underpaid

1. Check the figures. Compare your final payslip with your contract and the legal minimum.

2. Write to your employer. Set out what you think you're owed and why, and ask them to pay it by a set date.

3. Raise a grievance or appeal. If they won't pay, make a formal complaint in writing. Here's how to raise a workplace grievance.

4. Make a claim. Unpaid notice pay is usually claimed as breach of contract in the employment tribunal. First you must go through Acas early conciliation.

For dismissals on or after 1st October 2026, you normally have six months less one day from the date your employment ends to make your claim. More on the new tribunal deadline.

How Grapple Law can help

Grapple Law is a legal AI. It helps you work out how much notice you're owed, whether you've been paid correctly and whether you may have a claim.

It can then write to your employer to claim the shortfall. If you're negotiating your exit, it can help you with that, and also make sure your notice pay is properly covered in the deal.

Using Grapple Law is free to start, with a choice of legal services at a fraction of the cost of a traditional solicitor.

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Frequently asked questions about notice pay

Do I get notice pay if I'm off sick?

Often, yes. If your contract's notice period is less than one week longer than the legal minimum, you're generally entitled to full pay during your statutory notice, even while off sick.

If your contract gives you more notice than that, check its sick pay terms. They usually decide what you get.

Can my employer tell me to stay at home during my notice?

Yes, if your contract allows it. This is called garden leave: you're still employed and paid, but kept away from work. You usually can't start a new job until your notice ends.

Can I get notice pay as well as redundancy pay?

Yes. They're separate. If you qualify for redundancy pay, you should get it on top of your notice pay or PILON.

Is there a limit on what a tribunal can award?

Breach of contract claims in the employment tribunal are capped at £25,000.

Larger claims can go to the civil courts (the County Court or High Court), where you have up to six years to claim.

Find out more

• Made Redundant? Work Out What You're Owed and Check It's Fair
• Settlement Agreements
• Accused of Gross Misconduct? Your Rights and How to Respond