Final pay when someone leaves a job

Pay during the notice period

Anyone legally classed as an employee must be paid as normal when they’re working their notice period. 

If an employee is off work during their notice period, the amount they’re paid will depend on the type of notice they have.

Working out the notice period

It's important to know if someone has a statutory notice period, (the legal minimum notice period). Or, if the employee has an enhanced ('contractual') notice period. Check their employment contract to find out.

Statutory notice if an employee is dismissed or made redundant

If the employee has worked for the employer for:

  • 1 month to 2 years – the minimum notice is 1 week
  • 2 to 12 years – the minimum notice is 1 week for each full year they’ve worked
  • 12 years or more – the minimum notice is 12 weeks

For example, if an employee's worked for their employer for 4 years and 9 months, they're entitled to at least 4 weeks' notice.

Statutory notice if an employee resigns

The employee should check their contract to find out how much notice they must give. If it does not say, they must give at least 1 week’s notice if they’ve worked for the employer for more than 1 month. 

Employees who have worked for their employer for less than 1 month do not have the right to statutory notice.

Contractual notice

The employee should check their contract to find out:

  • how much notice they must get if they’ve been dismissed or made redundant
  • how much notice they must give if they resign

Employers can give employees more than the statutory notice, but they cannot give employees less.

If employers give employees the same or less contractual notice as statutory notice, the employee must get statutory notice.

Working out notice pay

Statutory notice pay

Employees must get their full normal pay during their notice period. 

If someone's pay is different each week, the employer should use the person's average weekly pay to work out their notice pay.

Work out weekly pay by using the 12 weeks leading up to the first day of the notice period. Add up the total amount of pay during the 12 weeks and divide it by 12 to get their average weekly pay. This is the minimum amount they must receive during their notice period.

Weekly pay should also include:

  • regular overtime, if the employee's contract says they must get paid for it
  • any bonuses or commission

Find out how to work out average pay for bonuses and commision on GOV.UK.

Contractual notice pay

If the employee has a contractual notice period (at least 1 week more than their statutory notice would be), they will not get statutory notice pay.

If the employee works their notice, they must get their full normal pay for any hours they work. The employer must follow the terms of the person's contract.

For example, if an employee has worked for their employer for 3 years, they're entitled to at least 3 weeks' statutory notice. But if their contract states their notice period is at least 6 weeks, they will not be entitled to statutory notice pay. They'll get their full normal pay for any hours they work.

If you need help working out notice pay, you can call the Acas helpline.

Furlough and statutory notice pay

If the employee leaving has been on 'furlough' (temporary leave) during the coronavirus (COVID-19) pandemic, they may have received reduced pay in the 12 weeks leading up to their statutory notice period.

If they usually work fixed hours, they must be paid their full normal pay while they’re on statutory notice, not their reduced furlough rate. 

The employer can still claim payments from HMRC's Coronavirus Job Retention Scheme during the notice period.

If someone's hours or pay varies

If their hours or pay vary, the employer must top up the pay for any furloughed hours to 100% when calculating notice pay. 

Example 1 – someone who usually works variable hours and has been furloughed for the last 12 weeks

An employee who usually works variable hours has been on furlough for the last 12 weeks and is now leaving. The employer already worked out the employee’s average hours and full normal pay when they claimed from HMRC’s Coronavirus Job Retention Scheme.

So the employer already knows the employee works an average of 30 hours a week and gets paid £10 an hour. This means the employee must get their full normal pay of £300 a week during their notice period.

Example 2 – someone who usually works variable hours and has been on flexible furlough for the last 12 weeks

An employee who usually works variable hours has been on flexible furlough for the last 12 weeks and is now leaving.

The employer had already worked out the employee's average hours and full normal pay when they claimed from HMRC's Coronavirus Job Retention Scheme. The employee normally works 30 hours a week on £10 an hour, receiving £300 a week.

They’ve been furloughed for half this time. They've been working for 15 hours a week on full pay, receiving £10 an hour. For the remaining 15 hours, they’ve been on flexible furlough on 80% pay, receiving £8 an hour.

The employer must top up their pay during flexible furlough to 100% when calculating notice pay, so they must receive £300 a week notice pay.

Example 3 – someone who returned from furlough in the last 12 weeks and is working more hours than usual

An employee who usually works variable hours has been on furlough for part of the last 12 weeks and is now leaving.

The employer had already worked out the employee's average hours and full normal pay when they claimed from HMRC's Coronavirus Job Retention Scheme. The employee normally works 30 hours a week on £10 an hour, receiving £300 a week.

They spent 6 weeks on furlough earning 80% pay. When they returned to work, they worked 40 hours a week for 6 weeks, receiving £400 a week.

To work out their weekly pay, the employer adds up the 6 weeks of pay during furlough, at their full normal pay of £300 a week. Then they add up the 6 weeks the employee worked at £400 a week.

The employer adds up these figures and divides by 12 to work out their average weekly pay of £350 a week. This means the employer must pay the employee at least £350 notice pay a week.

For more advice on how to calculate notice pay, you can call our helpline.

Furlough and contractual notice pay

If the employee leaving has a contractual notice period and is or has been on furlough during the coronavirus pandemic, the employer should check their contract to see how long their notice period is.

If the employee has a contractual notice period (at least 1 week more than their statutory notice would be), they will not get statutory notice pay.

Employees who have returned to work during their notice period must get their full normal pay for any hours they work. The employer must follow the terms of the person's contract.

For example, if an employee has worked for their employer for 3 years, they're entitled to at least 3 weeks' statutory notice. But if their contract states their notice period is at least 6 weeks, they will not be entitled to statutory notice pay. They'll get their full normal pay for any hours they work.

If employees are still on furlough during their notice period, the employer should check their contract to find out what pay they're entitled to.

When someone is off work during their statutory notice

The employee leaving must get full pay even if they're off during the statutory notice period. This includes if they're:

  • off sick
  • on holiday
  • on furlough
  • on maternity, paternity or adoption leave
  • willing to work but the employer has asked them not to

This means, for example, that someone getting Statutory Sick Pay before the notice period started would get full pay again (even if they're still off sick).

If someone refuses to work their notice period, they’ll have breached their contract and will not usually be entitled to be paid for it.

When someone is off work during their contractual notice

If employees are off work during their contractual notice period, the employer should check their contract to find out what pay they’re entitled to. How much they'll get paid will depend on the reason they're off work.

For example, if they're off sick the employee may be entitled to statutory and contractual sick pay.

This applies no matter who actually gave the notice. For example, if the person leaving resigned.