Notice periods
A notice period is the warning either side has to give the other before ending the employment relationship. The UK framework combines statutory minimums (Employment Rights Act 1996, section 86) with contractual amounts set by your employment contract. The longer of the two applies.
Statutory notice from the employer to the employee scales with length of service: one week between one month and two years of service, then one week per complete year, capped at 12 weeks for 12+ years. From the employee to the employer, the statutory minimum is one week from one month of service, regardless of length. Contractual notice is almost always longer for office and professional roles (typically one to three months, longer at senior level).
See the notice period calculator for the final-working-day arithmetic, the how notice periods work guide for the legal detail, or the how long is a notice period FAQ for the short answer.
Resignation
Resignation is a unilateral act in UK employment law. Once valid notice has been given in writing, your employment ends at the end of the notice period regardless of whether the employer formally accepts it. The employer can decide how to handle the notice period (working notice, garden leave, or PILON) but cannot extend or refuse the end date.
The exception is heat-of-the-moment resignations: case law treats spoken-in-anger statements as ambiguous, and a reasonable employer should check whether the employee genuinely intends to resign. Once written notice is given, retraction is no longer automatic; the employer can choose to accept it but isn’t obliged to.
For the full sequence from decision to first 30 days after, see the complete UK resignation guide. For drafting, the resignation letter generator produces a polished letter in three tones, and the templates page covers scenario-specific letters.
Redundancy
Redundancy is dismissal because the role is going (not the person). Statutory redundancy pay applies after two years of continuous service and is calculated by age and length of service: half a week’s pay per year worked under age 22, one week’s pay per year aged 22-40, one and a half weeks’ pay per year aged 41+. Service is capped at 20 years and weekly pay at £700 (in England, Wales and Scotland; figure uprated annually each April).
The first £30,000 of a redundancy package (combining statutory redundancy and any ex-gratia amount) is tax-free. Anything above is taxed as earnings. PILON and holiday pay are always fully taxable (since the 2018 PENP rules) and don’t share the £30,000 allowance.
For statutory redundancy figures, use the redundancy pay calculator. For the minimum notice your employer must give, the redundancy notice period calculator. For the runway after the lump sum lands, the redundancy runway calculator. For the consultation rules, see the redundancy consultation period page.
Garden leave
Garden leave is when your employer tells you to stay home during your notice period while continuing to pay your salary in the normal way. You’re still employed; all standard contractual obligations (confidentiality, non-solicit, non-compete) remain in force; benefits keep running. Whether the employer can put you on garden leave depends on your contract.
The most strategically important point about garden leave is how it interacts with post-termination restrictions. Non-compete clauses typically run from the end of employment, which under garden leave is the end of the notice period (not the start of the garden leave). So a three-month garden leave followed by a six-month non-compete keeps you out of the market for nine months total.
See the garden leave calculator for the date arithmetic, the garden leave explained guide for the legal detail, and the PILON vs garden leave comparison for the trade-offs.
PILON (payment in lieu of notice)
PILON is a lump sum your employer pays you instead of requiring you to work the notice period. Employment ends immediately on the date PILON is paid. Whether the employer can use PILON unilaterally depends on whether your contract contains an explicit PILON clause; if not, PILON requires mutual agreement.
PILON is fully taxable as earnings under PAYE and National Insurance. The Finance Act 2018 reforms introduced Post-Employment Notice Pay (PENP) rules that closed the previous tax-free treatment of non-contractual PILON. The £30,000 termination payment allowance does not apply to PILON.
Use the PILON calculator for the gross figure. The PILON explained guide covers the full picture including the tax history. The managing your PILON payment article covers what to do once the lump sum lands.
Settlement agreements
A settlement agreement is a legally binding contract between employer and employee that ends the employment relationship and waives the employee’s right to bring most claims, in exchange for an agreed financial settlement and other terms. Section 203 of the Employment Rights Act 1996 requires the employee to receive independent legal advice from a qualified adviser for the agreement to be binding; the employer typically pays a contribution toward this (commonly £350-£750 plus VAT).
Settlement agreements are most commonly used for senior redundancies, performance exits, grievance resolutions, and restructures where the employer wants finality. The financial package typically combines: salary to termination, PILON, unused holiday, statutory redundancy (if applicable), and an ex-gratia or enhanced amount. Tax treatment varies by line.
The settlement agreement calculator estimates the gross value of a package. The what is a settlement agreement article covers the structure; do I need a solicitor covers the statutory legal-advice requirement; and can I negotiate a settlement agreement covers the typical levers.
Probation
Probation is entirely a contractual arrangement; there is no UK statutory probation period. Common lengths are 3 or 6 months. During probation, notice on either side is usually shorter (often one week, sometimes two), and the statutory floor of one week from the employer applies once you’ve been employed for at least one month.
Ordinary unfair-dismissal protection requires two years of continuous service, so most probation dismissals don’t create unfair-dismissal exposure for the employer. Automatic and discrimination-based protections (whistleblowing, health and safety, protected characteristics) apply from day one.
Use the probation end date calculator for the date arithmetic. The can I resign during probation FAQ covers the resignation side; the can I be made redundant during probation FAQ covers the redundancy side.
Holiday entitlement
The Working Time Regulations 1998 require a minimum of 5.6 weeks of paid leave per year (28 days for a full-time five-day worker, usually inclusive of bank holidays). Many UK contracts give more, particularly office and professional roles. Holiday accrues throughout employment, including during the notice period, garden leave, and periods of sickness.
At termination, statutory holiday accrued but not taken must be paid out as cash; the employer can’t refuse and the employee can’t waive it. Contractual holiday above the statutory 28 days can sometimes be lost if the contract specifies that. The cash value uses the employee’s normal daily rate.
Use the holiday entitlement calculator for the accrual figure. The unused holiday pay guide covers the legal framework; can I take holiday during my notice period covers the in-notice scenario.
Final pay
Final pay arrives on the next normal payday after the last working day. The packet typically contains: salary up to and including the last working day, PILON (if applicable), unused holiday paid out, statutory redundancy (if applicable), any ex-gratia portion, and any contractual bonus or commission earned but not yet paid. Each line is calculated separately because each has its own tax treatment.
Salary, PILON, holiday pay and earned bonuses are fully taxable as earnings under PAYE plus NI. Statutory redundancy and ex-gratia portions of a termination package are tax-free up to a combined £30,000; the excess is taxed as earnings. Errors in the final pay packet are common and usually fixable in the next payroll cycle if raised promptly.
The final pay estimator gives a rough net figure. The final pay after redundancy article covers what to check before signing anything; the redundancy tax estimator handles the tax-specific maths.
Related resources on this site
For deeper plain-English references on the two most common situations, see redundancy rights UK and notice period rights UK. For the underlying calculators and tools, see the financial planning hub. For long-form guides, see /guides/. For specific questions, see /faqs/. For external sources, see employment law resources.