The formula
How to calculate notice pay
Statutory minimum notice in the UK is one week after a month of service, then one week for each complete year, capped at twelve weeks. Contracts frequently offer more, and whichever is greater applies.
Notice can be worked, paid in lieu, or spent on garden leave. Pay in lieu of notice is now taxable as earnings in all cases, following the 2018 rules that removed the previous distinction.
The inputs, one by one:
- Complete years of service (years)
- Weekly pay
- Contractual notice (weeks) — if your contract gives more than the statutory minimum
Results appear immediately — there is nothing to submit. Changing a field rewrites the link, so you can share the exact scenario you are looking at.
Where a figure is not immediately to hand — a precise interest rate, an exact balance — a reasonable estimate is a perfectly good starting point. Because every result updates instantly, refining a rough guess into the real figure once you have it takes a moment, and nothing about the calculation depends on getting it exactly right on the first attempt.
Why notice pay matters
Most people who look up a notice pay calculation already have a specific number in mind — a quote, an offer, a target — and want to check it rather than learn the theory behind it. This page is built for that: enter your own figures, see the result immediately, and change any field to see how the answer moves without redoing the arithmetic from scratch each time.
This tends to come up when comparing two concrete alternatives — two lenders, two savings products, two ways of structuring the same decision — rather than in the abstract. Run both scenarios through the same calculator with the same assumptions and the comparison becomes fair, because the only thing changing between the two results is the number you are actually trying to test.
The reason a page like this exists at all, rather than leaving the calculation to a spreadsheet or a textbook appendix, is that the formula behind notice pay is fiddly enough to get wrong by hand but not complicated enough to need specialist software. That middle ground — real enough maths to matter, simple enough to check instantly — is exactly what a dedicated calculator is for, and it is why the same figure recalculated here should match a careful manual calculation almost exactly.
Where the same calculation needs to be run for several different scenarios side by side — three loan offers, two savings plans — the fastest approach is usually to open the calculator in a second browser tab for each one, so that the results can be compared directly rather than overwriting each other in a single set of fields.
Worked example
A concrete run-through, using the values already in the fields:
- Complete years of service: 6 years
- Weekly pay: 865
- Contractual notice: 8 weeks
That gives:
- Statutory notice: 6 weeks
- Notice you are entitled to: 8 weeks
- Notice pay: 6,920
These figures are only the calculator's own starting values, included so the working is visible rather than hidden inside the tool above. Replace them with your own numbers and the same arithmetic applies — nothing about the method changes, only the inputs feeding it.
Reading the result
Twelve years of service earns twelve weeks — roughly three months of pay. That cap applies however long you have been there, so 25 years earns the same statutory notice as 12.
Where this goes wrong. Notice pay and redundancy pay are separate entitlements. A redundancy settlement should include both, and the first £30,000 of the redundancy element can be tax-free while notice pay is always taxable.
A useful check on any unfamiliar result is to compare it against a rough mental estimate first — round the inputs to convenient numbers and see whether the calculator's answer lands in roughly the same territory. A wildly different figure usually means one of the fields was entered in the wrong unit, most often a percentage typed as a whole number where a decimal was expected, or the reverse.
One week after a month of service, then one week per complete year up to twelve. Your contract may give more, and if it does, the contract wins.
Yes. Since April 2018 all PILON is treated as earnings and taxed accordingly, whether or not the contract provides for it.
The headline figure is statutory notice. With 6 years complete years of service, 865 weekly pay and 8 weeks contractual notice, that comes to 6 weeks. Change any field and the figure moves with it.
Whenever one of the underlying figures changes — a new interest rate, a different balance, an updated term — since the result only reflects what is currently in the fields. There is no need to keep a separate record of past results; the web address for a filled-in version already carries the figures used to produce it.
Not unless a tax rate or a fee is explicitly one of the inputs above. Where it is not, the figure shown is a gross calculation, and any tax due depends on your personal circumstances and current tax rules, which are worth checking separately.
The arithmetic itself is exact — the calculator applies the formula shown above precisely, with no rounding until the final figure is displayed. The uncertainty, where it exists, is entirely in the inputs: an estimated rate or an approximate balance carries that same approximation through to the result.