{"id":15874,"date":"2024-08-07T15:48:00","date_gmt":"2024-08-07T15:48:00","guid":{"rendered":"https:\/\/www.brightmine.com\/uk\/?post_type=resources&#038;p=15874"},"modified":"2026-07-27T10:50:59","modified_gmt":"2026-07-27T10:50:59","slug":"how-to-make-payment-in-lieu-of-notice","status":"publish","type":"resources","link":"https:\/\/www.brightmine.com\/uk\/resources\/hr-compliance\/pay-and-benefits-compliance\/how-to-make-payment-in-lieu-of-notice\/","title":{"rendered":"How to make a payment in lieu of notice"},"content":{"rendered":"\n<div class=\"wp-block-group alignwide has-primary-white-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-b5fc8583 wp-block-group-is-layout-constrained\" style=\"border-radius:25px;padding-top:var(--wp--preset--spacing--30);padding-right:var(--wp--preset--spacing--30);padding-bottom:var(--wp--preset--spacing--30);padding-left:var(--wp--preset--spacing--30)\">\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-7fc3d43a wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:70%\">\n<p class=\"\">By <strong><strong>Darren Newman<\/strong><\/strong>, Brightmine Consultant Editor<\/p>\n\n\n\n<p class=\"\">Consider including a right to terminate with a payment in lieu of notice in employment contracts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sign up today to get:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li class=\"\">What is a payment in lieu of notice?<\/li>\n\n\n\n<li class=\"\">Contractual provision for payment in lieu of notice<\/li>\n\n\n\n<li class=\"\">When is a payment in lieu of notice appropriate?<\/li>\n\n\n\n<li class=\"\">Should a settlement agreement be used with a payment in lieu of notice?<\/li>\n\n\n\n<li class=\"\">When is a period of garden leave more appropriate than a payment in lieu of notice?<\/li>\n\n\n\n<li class=\"\">Confidential information and company property<\/li>\n\n\n\n<li class=\"\">Making the payment in lieu of notice<\/li>\n\n\n\n<li class=\"\">Benefits in kind<\/li>\n\n\n\n<li class=\"\">Payment for holiday entitlement that would have accrued during the notice period<\/li>\n\n\n\n<li class=\"\">Calculation of redundancy payments where a payment is made in lieu of notice<\/li>\n\n\n\n<li class=\"\">Taxation of payments in lieu of notice<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Want to see more?<\/h3>\n\n\n\n<p class=\"\">For full access to <strong>How to make a payment in lieu of notice<\/strong>, sign up to a HR and Compliance Centre subscription today.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"\/uk\/quote\/?intcmp=hrcc-migrated-resource|quote|request-a-quote\" style=\"border-radius:25px\">Request a quote<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column lnrs-hide-block-on-mobile is-layout-flow wp-block-column-is-layout-flow\" style=\"border-left-color:var(--wp--preset--color--secondary-gray);border-left-width:2px;padding-left:10px;flex-basis:30%\">\n<div class=\"wp-block-group has-global-padding is-layout-constrained wp-block-group-is-layout-constrained wp-container-2 is-position-sticky\">\n<div class=\"wp-block-group has-secondary-gray-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-0b691c38 wp-block-group-is-layout-constrained\" style=\"border-radius:1rem;padding-top:15px;padding-right:15px;padding-bottom:15px;padding-left:15px\">\n<h3 class=\"wp-block-heading\">Latest updates<\/h3>\n\n\n\n<p class=\"\">Updated to reflect changes to the rules on taxation of payments in lieu of notice from 6 April 2018.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-group has-bleach-white-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-a36fa716 wp-block-group-is-layout-constrained\" style=\"border-radius:14px;padding-top:10px;padding-right:15px;padding-bottom:15px;padding-left:15px\">\n<h3 class=\"wp-block-heading\">Navigate HR complexity with confidence<\/h3>\n\n\n\n<p class=\"\">With Brightmine, you can build powerful people strategies, implement best practices and set your organisation up for a brighter future.<\/p>\n\n\n\n<p class=\"\">Learn how our tools, resources and automation can empower you and your team.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"\/uk\/solutions\/?intcmp=cta|blog|solutions|learn-more\" style=\"border-radius:25px\">Learn more<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group lnrs-hide-block-on-mobile has-global-padding is-layout-constrained wp-container-core-group-is-layout-ad1af2a0 wp-block-group-is-layout-constrained\" style=\"margin-top:0;margin-bottom:0;padding-top:0;padding-bottom:0\">\n<hr class=\"wp-block-separator has-text-color has-secondary-gray-color has-alpha-channel-opacity has-secondary-gray-background-color has-background\" style=\"margin-top:10px;margin-bottom:10px\"\/>\n\n\n\n<p class=\"\">Read more articles:<\/p>\n\n\n\n<div class=\"wp-block-query is-layout-flow wp-block-query-is-layout-flow\"><ul class=\"wp-block-post-template is-layout-flow wp-container-core-post-template-is-layout-ea1fff98 wp-block-post-template-is-layout-flow\"><li class=\"wp-block-post post-21368 resources type-resources status-publish has-post-thumbnail hentry category-guides-how-to topic-pay-transparency topic-total-rewards\">\n<h2 style=\"font-size:clamp(14px, 0.875rem + ((1vw - 3.2px) * 0.274), 16px);line-height:1.3;text-decoration:underline; margin-top:10px;margin-bottom:10px;margin-left:0;margin-right:0;\" class=\"has-link-color 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erode employee trust<\/a><\/h2>\n<\/li><li class=\"wp-block-post post-21186 resources type-resources status-publish has-post-thumbnail hentry category-press-releases topic-pay-trends\">\n<h2 style=\"font-size:clamp(14px, 0.875rem + ((1vw - 3.2px) * 0.274), 16px);line-height:1.3;text-decoration:underline; margin-top:10px;margin-bottom:10px;margin-left:0;margin-right:0;\" class=\"has-link-color wp-elements-0b1b36f3c2dfa7682bfd13b67e3228a9 wp-block-post-title has-text-color has-primary-black-color\"><a href=\"https:\/\/www.brightmine.com\/uk\/resources\/total-rewards\/pay-trends\/pay-trends-2026-august-report\/\" target=\"_self\" >Pay trends 2026 | August Report<\/a><\/h2>\n<\/li><\/ul><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-group has-primary-white-background-color has-background has-global-padding is-layout-constrained wp-container-core-group-is-layout-4b7a3f7f wp-block-group-is-layout-constrained\" 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guide<\/span>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<h3 class=\"title\" style=\"color: #00728B\"><a href=\"https:\/\/www.brightmine.com\/uk\/resources\/hr-compliance\/contract-of-employment\/how-to-change-the-terms-of-existing-employment-contracts\/\">How to change the terms of existing employment contracts<\/a><\/h3>\n\t\t\t\t\t\t<p style=\"color: #202526\">A guide explaining how employers can lawfully change the terms of existing employment contracts, including consultation, agreement, dismissal &#8230;<\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t<div class=\"lnrs-resource-hub-widget__resource\" style=\"background-color: #f3f2f0\">\n\t\t\t\t\t<a href=\"https:\/\/www.brightmine.com\/uk\/resources\/hr-compliance\/contract-of-employment\/variation-of-contracts\/\"><div class=\"lnrs-resource-hub-widget__resource_image\" style=\"background-image: 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style=\"border-radius:25px;margin-top:var(--wp--preset--spacing--30);margin-bottom:var(--wp--preset--spacing--30);padding-top:var(--wp--preset--spacing--40);padding-right:var(--wp--preset--spacing--30);padding-bottom:var(--wp--preset--spacing--40);padding-left:var(--wp--preset--spacing--30)\">\n<div class=\"wp-block-group has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\">\n<h3 class=\"wp-block-heading\" id=\"h-topics-on-this-page\" style=\"font-style:normal;font-weight:500\">Topics on this page<\/h3>\n\n\n\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-6c531013 wp-block-group-is-layout-flex\">\n\n<div class=\"taxonomy-topic has-link-color wp-elements-5ec59eb01c09ec2f1d84a6b36973ff83 wp-block-post-terms\"><a href=\"https:\/\/www.brightmine.com\/uk\/resources\/hr-compliance\/contract-of-employment\/\" rel=\"tag\">Contracts of employment<\/a><span class=\"wp-block-post-terms__separator\">, <\/span><a href=\"https:\/\/www.brightmine.com\/uk\/resources\/hr-compliance\/pay-and-benefits-compliance\/\" rel=\"tag\">Pay and benefits compliance<\/a><\/div><\/div>\n\n\n\n<hr class=\"wp-block-separator has-text-color has-cararra-gray-color has-alpha-channel-opacity has-cararra-gray-background-color has-background is-style-wide\"\/>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-about-the-author\" style=\"font-style:normal;font-weight:500\">About the author<\/h3>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-28f84493 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:100px\">\n<figure class=\"wp-block-image size-full is-resized is-style-rounded\"><img loading=\"lazy\" decoding=\"async\" width=\"400\" height=\"400\" src=\"https:\/\/cdn.brightmine.com\/wp-content\/uploads\/sites\/2\/2024\/10\/05145201\/1675242852003.jpeg\" alt=\"\" class=\"wp-image-16817\" style=\"object-fit:cover;width:100px;height:100px\" srcset=\"https:\/\/cdn.brightmine.com\/wp-content\/uploads\/sites\/2\/2024\/10\/05145201\/1675242852003.jpeg 400w, https:\/\/cdn.brightmine.com\/wp-content\/uploads\/sites\/2\/2024\/10\/05145201\/1675242852003-300x300.jpeg 300w, https:\/\/cdn.brightmine.com\/wp-content\/uploads\/sites\/2\/2024\/10\/05145201\/1675242852003-150x150.jpeg 150w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><\/figure>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p class=\"\"><strong>Darren Newman<\/strong><br>Employment Lawyer, Employment Law Ltd<\/p>\n\n\n\n<p class=\"\">Darren Newman is an employment lawyer and consultant editor at Brightmine. He qualified at the Bar in 1990, and has extensive experience of representing both employers and employees in the employment tribunal. Darren has provided employment law training to major government departments, commercial organisations, local authorities and public bodies.<\/p>\n\n\n\n<p class=\"\">Connect with Darren on <a href=\"http:\/\/linkedin.com\/in\/darrennewman\/\" target=\"_blank\" rel=\"noreferrer noopener\">LinkedIn<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A payment in lieu of notice allows an employer to terminate employment immediately by paying notice pay instead of requiring the employee to work their notice period. This guide explains when a PILON can be used, the contractual and tax implications, and how to calculate payments correctly.<\/p>\n","protected":false},"author":71,"featured_media":16013,"comment_status":"closed","ping_status":"closed","template":"wp-custom-template-new-resources","categories":[12],"tags":[],"topic":[31,77],"class_list":["post-15874","resources","type-resources","status-publish","has-post-thumbnail","hentry","category-guides-how-to","topic-contract-of-employment","topic-pay-and-benefits-compliance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How to make a payment in lieu of notice | Brightmine<\/title>\n<meta name=\"description\" content=\"Learn how to make a payment in lieu of notice, including contractual requirements, tax treatment, benefit calculations and when a PILON is appropriate under UK employment law\" \/>\n<meta name=\"robots\" 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