Notice Pay Calculator
Calculate an employee's statutory minimum notice period and the pay owed for it, for 2026/27.
The notice pay calculator calculates how much an employer must pay an employee during the notice period when employment ends. The notice pay calculator determines termination costs by applying statutory minimum notice rules and calculating a week's notice pay based on the details you enter: gross weekly or annual pay, length of continuous service, and the notice period being given. The notice pay calculator uses the employee's length of service to determine the statutory notice entitlement. The statutory notice entitlement gives one week's notice for service of one month to two years, then one additional week for each complete year of service, capped at a maximum of 12 weeks. The notice pay calculator multiplies the statutory notice weeks by the employee's normal weekly earnings to produce the total notice pay due.
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Notice pay in employment is the wage an employee receives for the notice period between being told employment will end and the final working day, covering full normal pay whether or not the employee works it. Notice pay has two types. Statutory notice pay is the minimum notice pay set by law based on length of continuous service and cannot be reduced below the legal minimum by contract. Contractual notice pay is the notice payment set out in the employment contract, which can be longer than the statutory minimum, and whichever is greater applies. Employees with at least one month of continuous service are entitled to notice pay. The notice period is determined by taking the longer of the statutory minimum based on service length and the period stated in the contract. Payment in lieu of notice (PILON) is a lump sum paid so the employee leaves immediately instead of working the notice period, covering what the employee would have earned during that time. PILON is taxed as earnings and is subject to income tax and National Insurance, with the taxable amount calculated as the post-employment notice pay (PENP) based on basic pay for the unworked notice period.
Employers must give at least the statutory minimum notice and pay full normal pay throughout the notice period. Notice pay is one component of total termination costs paid on top of redundancy pay and any outstanding holiday pay. An accurate notice pay calculation for 2026/27 uses current continuous service records and the latest week's-pay rules. Employers should re-check service length and contractual notice terms before finalising the figure to ensure compliance and avoid underpaying statutory entitlements.
What is the notice pay calculator?
The notice pay calculator is an online tool that calculates the pay due to an employee during the notice period. The notice pay calculator requires inputs to perform the calculation: gross weekly or annual pay, length of continuous service, and the notice period being given. The notice pay calculator outputs the total notice pay due for either the statutory or contractual notice period.
The notice pay calculator helps employers and employees understand financial obligations during the termination process. The notice pay calculator ensures compliance with both legal minimums and contractual terms, providing clarity on the exact amount owed based on the entered data. The notice pay calculator helps avoid underpayment issues and assists in budgeting termination costs.
What is the purpose of a notice pay calculator?
The purpose of a notice pay calculator is to calculate an employer's notice-period liability before ending a contract. The notice pay calculator enables employers to budget termination costs, which keeps compliance with statutory notice requirements and avoids underpayment. The notice pay calculator calculates the notice pay based on the employee's length of service and weekly pay, which helps prevent legal disputes related to employment termination.
Employers use a notice pay calculator to forecast financial obligations associated with employee departures. The notice pay calculator compares statutory minimum notice periods with any longer contractual terms, applying the longest applicable duration. The notice pay calculator helps employers meet legal obligations and maintain fair practices in handling employment terminations.
How does the notice pay calculator work?
The notice pay calculator applies the statutory minimum notice rules to the length of service and weekly pay you enter. The notice pay calculator calculates notice pay by first assigning one week of notice for service lasting from one month to two years. For each complete year of service beyond two years, the notice pay calculator adds an additional week, with a maximum cap of 12 weeks. The notice pay calculator multiplies the total notice weeks by the employee's weekly pay to determine the statutory notice pay.
The notice pay calculator compares the statutory result with any contractual notice period specified in the employment contract, using the longer period to ensure compliance with legal requirements. For employees with variable pay or irregular working hours, the notice pay calculator determines a week's pay by averaging weekly earnings over the relevant reference period, the 12 weeks prior to receiving redundancy notice. The averaging method reflects the employee's earnings, including guaranteed overtime, bonuses, and commissions, while excluding any weeks where pay was missed due to holidays or sickness.
How does the calculator use length of service?
The notice pay calculator counts complete years of continuous service to determine the number of weeks of notice an employee is entitled to receive. Length of service directly impacts the statutory notice period. Employees with less than one month of service receive no statutory notice. Employees with one month but under two years of service are entitled to one week of statutory notice. For service between two and twelve years, the entitlement increases by one week for each complete year of continuous service. The statutory notice period is capped at 12 weeks, even if the employee has worked for more than 12 years. The cap sets a maximum limit on the employer's statutory notice obligation, although contractual terms may specify longer periods that would take precedence.
What is the formula to calculate statutory notice pay?
Statutory notice pay equals the number of statutory notice weeks multiplied by a week's pay. The statutory notice pay formula determines the minimum payment an employee must receive during the notice period when employment ends.
Formula
Statutory notice pay = Statutory notice weeks × A week's pay
Key Definitions
Statutory Notice Weeks: Determined by the employee's length of continuous service — one week for service between one month and two years, then one additional week for each complete year of service thereafter, up to a maximum of 12 weeks for 12 or more years of service.
A Week's Pay: The employee's normal weekly earnings, which include regular contractual pay, such as salary, guaranteed overtime, and contractual bonuses or commissions. For employees with variable hours, a week's pay is the average weekly pay over the relevant 12-week reference period.
Worked Example
For an employee with five years of continuous service earning £600 per week, the statutory notice pay calculation is as follows. The statutory notice weeks are five weeks — one week for each complete year of service over two years. The calculation is 5 weeks × £600 = £3,000. The worked example shows how statutory notice pay is calculated from service duration and weekly earnings.
What is statutory minimum notice?
Statutory minimum notice is the least notice an employer must give by law based on continuous service. The statutory minimum notice period is determined by the length of an employee's continuous service with their employer. Employees who have worked for one month up to two years are entitled to one week's notice. For employees with more than two years of service, the notice period increases by one week for each complete year, up to a maximum of 12 weeks for those with 12 or more years of service. The Employment Rights Act 1996 sets statutory minimum notice as a baseline level of protection for employees when their employment ends.
How is a week's notice pay calculated?
A week's notice pay equals the employee's normal weekly earnings, incorporating regular contractual pay. For employees with variable hours or pay, a week's notice pay is calculated based on the average weekly pay over the relevant reference period. The reference period covers the 12 weeks before the notice is given, excluding any weeks where no pay was earned due to holidays or sickness. The averaging method gives employees compensation reflective of typical earnings during the notice period.
What Is Notice Pay?
Notice pay is the compensation an employee receives for the duration between being informed that employment will end and the final working day. Notice pay gives the employee full regular pay during the notice period, whether the employee continues working or receives payment in lieu of notice (PILON). Notice pay applies to termination scenarios including dismissal, redundancy, or resignation, and represents the wage owed across either the contractual or statutory notice period when an employment contract is terminated.
Notice pay in employment
Notice pay in employment is the wage owed across the contractual or statutory notice period when a contract is terminated. Notice pay applies to dismissal, redundancy, and resignation. Notice pay gives employees their earnings during the transition period from employment to termination.
Statutory notice pay
Statutory notice pay is the minimum notice pay set by law based on the length of continuous service. It is mandatory and cannot be reduced below the legal minimum by a contract. The Employment Rights Act 1996 sets it at one week's notice for one month to two years of service, then one additional week per complete year beyond two years, capped at a maximum of 12 weeks.
Contractual notice pay
Contractual notice pay is the notice pay set out in the employment contract, which can be longer than the statutory minimum. An employee is entitled to whichever is greater between statutory and contractual notice periods, providing financial security during the transition period.
How Much Notice Are Employees Entitled To?
Employees in the UK are entitled to a statutory minimum notice period based on length of continuous service. The Employment Rights Act 1996 defines the statutory minimum notice entitlement and gives employees fair notice when employment is terminated. The statutory notice period is structured as follows:
1 month to 2 years of service
A minimum of 1 week of notice.
2 to 12 years of service
1 week of notice per complete year of service.
12 years or more of service
The notice period is capped at a maximum of 12 weeks.
The statutory notice framework applies to dismissals, redundancies, and resignations, giving all eligible employees appropriate notice. The actual notice period provided to an employee is the longer of the statutory minimum or the contractual notice period specified in the employment contract.
Who Is Entitled to Notice Pay?
Any employee with at least one month of continuous service is entitled to statutory notice pay. Notice pay entitlement applies whether the employee works full-time or part-time. Notice pay is a fundamental employment protection that covers all employees once they pass the one-month threshold under the statutory notice framework. Casual workers and zero-hours contract workers may not qualify if they lack the continuous employment status required, but all employees with the requisite service duration are covered.
How is the notice period determined?
The notice period is the longer of the statutory minimum based on service and the period stated in the contract. Employers must first check the employment contract to identify any agreed-upon notice terms. Contractual notice periods are longer than the statutory minimum, especially in senior roles or positions requiring more extended handover periods. The employer compares the contractual notice period against the statutory minimum notice entitlement, which is calculated based on the employee's length of continuous service. The statutory minimum follows a tiered structure: employees with service between one month and two years are entitled to one week's notice, employees with two to twelve years of service receive one week's notice for each complete year worked, and employees with twelve or more years of service are capped at a maximum of twelve weeks' statutory notice. Whichever period is longer, the contractual or the statutory, becomes the enforceable notice period that the employer must provide when terminating the employment relationship.
Minimum statutory notice period
The minimum statutory notice period is one week for employees with one month to two years of continuous service. It gives employees adequate time to transition from their current employment.
Maximum statutory notice period
The maximum statutory notice period is 12 weeks for employees with 12 or more complete years of continuous service. UK employment law mandates this and gives long-serving employees adequate notice before termination.
What Is Payment in Lieu of Notice (PILON)?
Payment in lieu of notice (PILON) is a lump sum paid so the employee leaves immediately instead of working the notice period. PILON compensates the employee for the pay they would have earned during the notice period, giving them their full salary entitlement without needing to work through the notice duration. PILON is distinct from garden leave, where the employee remains employed but does not attend work. Garden leave gives the employee full pay and benefits while not performing work duties during the notice period.
How PILON Is Taxed
Payment in lieu of notice (PILON) is taxed as earnings and is subject to income tax and National Insurance. The taxable amount is the post-employment notice pay (PENP), calculated on the basic pay for the unworked notice period. Employers must calculate and deduct tax and NICs from PILON payments before issuing them to employees.
What Should Employers Know About Notice Periods?
Employers must give at least the statutory minimum notice and pay full normal pay throughout the notice period. The statutory minimum is determined by the employee's length of continuous service: one week for those with one month to two years of service, then one week per complete year of service thereafter, capped at a maximum of 12 weeks for employees with 12 or more years. If the employment contract specifies a longer notice period, the contractual term applies instead. Throughout the notice period, whether worked or not, employers must pay the employee's full normal pay, which includes all regular contractual earnings such as guaranteed overtime, bonuses, and commission as specified in the contract.
Notice pay is due alongside any redundancy pay, and the two entitlements are separate and calculated independently. When an employee is made redundant, the employee may be entitled to both statutory redundancy pay, if they have at least two years of continuous service, and notice pay for the applicable notice period. When payment in lieu of notice (PILON) is given, the statutory notice period should still be included when calculating the relevant date for redundancy pay purposes, which can affect the total redundancy entitlement. For a complete view of redundancy entitlements and how redundancy pay interacts with notice pay in total termination costs, employers should refer to guidance on redundancy pay calculations, which represents a distinct component of the employee's rights upon termination.
How Notice Pay Fits Into Total Termination Costs
Notice pay is one component of total termination costs, paid on top of redundancy pay and any outstanding holiday pay. When an employment contract ends, especially in redundancy situations, employers must account for multiple financial obligations that together constitute the full termination liability. Notice pay represents the salary owed for the notice period, whether worked or paid in lieu, and sits alongside statutory or enhanced redundancy payments as a separate entitlement.
The total cost calculation requires employers to separately calculate notice pay using the employee's weekly earnings and notice period length, then add any redundancy pay calculated based on age, service, and weekly pay, capped at the statutory maximum, plus any accrued but untaken holiday pay owed at the final pay date. For a complete picture of redundancy entitlement, the Redundancy Pay Calculator provides the separate redundancy component, which when combined with notice pay and holiday pay gives the full termination cost an employer must budget for when ending the contract.
Keeping Your Notice Pay Calculation Accurate for 2026/27
An accurate notice pay calculation uses current continuous service and the latest week's-pay rules for 2026/27. Employers must re-check service length and contractual notice terms before finalizing the figure. The re-check ensures compliance with statutory minimums and prevents underpayment. The calculation must reflect the employee's actual continuous service, counted in complete years and months, to determine the correct number of statutory notice weeks. For variable-hours employees, the weekly pay should be averaged over the appropriate reference period, the 12 weeks preceding the redundancy notice, excluding any weeks where no pay was earned due to holidays or sickness. The averaging method gives a week's pay figure that reflects normal earnings.
Employers should verify that contractual notice periods stated in employment agreements are compared against statutory minimums, using whichever is longer as the basis for the calculation. Before making any payment, whether notice is worked or provided as payment in lieu of notice (PILON), confirm that all tax and National Insurance contributions are calculated and deducted, as PILON is taxed as regular earnings. Cross-referencing notice pay with other termination costs, such as statutory redundancy pay and outstanding holiday entitlement, helps ensure the total termination liability is budgeted and paid by the employee's final day or agreed payment date.