What is a PILON?
A Payment In Lieu Of Notice (PILON) is a lump sum your employer pays you instead of requiring you to work your full notice period. It is compensation for the notice you did not receive.
A PILON is separate from your statutory redundancy pay. You can receive both. The key difference:
- PILON = pay for notice not worked. Treated as earnings — subject to Income Tax and National Insurance.
- Statutory redundancy pay = pay for years of service. The first £30,000 is always tax-free.
Use this calculator to find out what notice pay you are entitled to based on your length of service and weekly pay.
Calculate your notice pay
Enter your details below. This uses the statutory minimum notice period under the Employment Rights Act 1996.
Statutory minimum notice periods
Under the Employment Rights Act 1996, your employer must give you at least:
- 1 week if you have worked for at least 1 month but less than 2 years
- 1 week per complete year of service for 2–12 years
- 12 weeks maximum for 12 or more years
Your employment contract may specify a longer notice period — if so, the contractual period is what you are owed. Check your contract or ask HR.
Contractual vs statutory PILON
No PILON clause in your contract
Your employer can still choose to pay you in lieu of notice, but they are limited to the statutory minimum (above). This is calculated as a week's pay per week of notice owed, capped at the statutory weekly limit.
2026 weekly cap: £751 (UK) / £783 (Northern Ireland)
Contractual PILON clause
If your contract includes a PILON clause, your employer can pay you the full contractual amount agreed in writing. This may be more than the statutory minimum. Check your contract for the exact wording.
Contractual PILON is treated as earnings and subject to Income Tax and National Insurance via PAYE.
PILON is not the same as redundancy pay
It is a common misconception that you have to choose between notice pay and redundancy pay. In fact, they are separate entitlements:
Payment typeTreatment
PILON (notice pay)Taxable as earnings
Statutory redundancy payFirst £30,000 tax-free
Enhanced contractual redundancyTaxable as earnings
You can receive a PILON and your full statutory redundancy entitlement at the same time — they are calculated independently and appear separately on your P45 and final payslip.
Also calculate your statutory redundancy pay
If you have been made redundant, you may also be entitled to statutory redundancy pay based on your age and length of service. Use our free calculator to check your entitlement.
Open redundancy calculator →
Important: This calculator provides an estimate based on statutory minimum notice periods. Your contractual notice period may be higher. Always verify with ACAS or a qualified employment solicitor — particularly if your contract specifies enhanced terms or if you believe you have not received the correct amount.