Final pay when someone leaves a job

Pay during the notice period

Anyone legally classed as an employee must be paid as normal for any time they work during 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.

Checking the notice period

It's important to check the employment contract to confirm if the employee has either:

  • the legal minimum notice period ('statutory notice period')
  • a notice period that's longer and is written in the contract ('contractual notice period')

This may help when calculating the final pay for the employee's notice period.

If an employee is dismissed, made redundant or resigns

How much notice an employee gets depends on if they're:

  • dismissed or made redundant
  • resigning

The employer may give more notice than the statutory minimum, but they cannot give the employee less.

Find out more about notice periods

Notice pay when the employee is working

Employees must get their full normal pay for any time they work 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 commission on GOV.UK.

Notice pay if the employee is off work

An employee's notice pay might be affected if they do not work during their notice period because they're:

  • off sick
  • on holiday
  • on furlough
  • on maternity, paternity or adoption leave or Shared Parental Leave
  • willing to work but the employer has asked them not to (because of lay-offs or short-time working)

The amount of notice pay they're entitled to depends on their contractual or statutory notice period and whether they're:

  • dismissed or made redundant
  • resigning

If an employee has been dismissed or made redundant

They're entitled to their full normal pay if their contractual notice is:

  • the same as statutory notice
  • up to 1 week longer than statutory notice
Example
Sam has been made redundant. They've worked for their employer for 7 years and have a contractual notice period of 7 weeks. If they’re off sick during the notice period, they get their full normal pay for the whole 7 weeks.

If their contractual notice period is longer than statutory by a week or more, they're only entitled to the appropriate pay for the reason they’re off, for example Statutory Sick Pay (SSP).

An employee who's already off work might have already been paid all their statutory entitlement. For example, if they’ve been off sick longer than the statutory allowance of 28 weeks, or if they’re now on the unpaid part of their maternity leave. This could mean they're not entitled to any pay during their notice period.

If an employee has resigned and they're off work during their notice period

When an employee resigns, you should check their contract to see what their notice period for dismissal would be. Their notice pay rights depend on whether their dismissal notice period is statutory or contractual.

If the dismissal notice period is less than a week longer than the statutory notice period

They’re entitled to 1 week's full normal pay if they’re off work during their notice period.

For any remaining weeks they’re off work, they're only entitled to the type of pay for the reason they're off. For example, if they're off on maternity leave they would only be entitled to any maternity pay due to them.

If the dismissal notice period is more than a week longer than the statutory notice period

They're only entitled to be paid for the reason they're off during their notice period, for example Statutory Sick Pay (SSP) if they're off sick.

Example
Robyn's contractual dismissal notice is the same as their statutory notice. If they resign and then are off sick, they're entitled to full pay for up to 1 week. If they're off for longer and their notice period is longer, they may only get the sick pay rate they're entitled to (this might be SSP or contractual sick pay) for the remaining time.

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