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What does payment of salary in Lieu of Notice mean?

March 14th, 2009 · 17 Comments · Basic Rate of Tax, Compromise Agreements, Contract of Employment, National Insurance Contributions, Payment in Lieu of Notice, Payment of Normal Salary

A number of employees that we come across do not seem to know the meaning of  payment in lieu of notice. What does it mean? It means that your employer is paying you upfront so you do not have to work out your notice period. So, for instance, if you have a 3 months’ notice period in your employment contract, your employer would pay you three months salary in lieu of notice. If you have a two month notice period in your contract of employment, your employer will pay you two months salary in lieu of notice.

In some cases, employees have received a year’s salary in lieu of notice. As always, this salary will be subject to the appropriate deductions of tax and National Insurance contributions (based upon the salary rates current at the time of notice).


17 Comments so far ↓

  • adewole

    Thanks for the knowlegde.

  • Rahul

    Hi there, i was working for a betting company, due to some problem happened i had to resign.

    Well the problem was i took a bet of 6500 but a card was declined and the race was off. I could not cancelled the bet. The customer walk away and i left with tension and pressures.

    I had only two option at the time, either to reimburse the money and save my job which i tried very hard but in vain.
    So i went with the second choice of winning this money and replace it. Unfortunately it turns out bad and the amount got mounted to 12000 within a period of time. I become a gambling habit person and that bet was placed within the company itself.

    On sun the 8th june 14 i had resigned with immediate effect. I wrote an email and explain the whole situation to my Area manager.

    I meant to be getting paid for my monthly wages on 13th june but when i checked my account…there was no money came from my company. On Sat 14th i received only my payslips and P45 by post. When i opened my payslip it say at the bottom that the pay method is cheque rather than Bac payment as usual.

    I just want to know if they gonna pay me or take my whole month salary to cover this.

    PLease advice.

    Thanks in adv

  • kumar

    What exactly it means;
    During the probationary period either party may terminate this contract of service by giving the other party two weeks written notice in advance or two weeks pay in lieu of notice and thereafter this contract shall be deemed terminated and be null and void.

  • admin

    The words “instead of” can be used rather than “in lieu of”. Payment in lieu of notice means you would be paid instead of working out the notice period, which you are normally required to give.

    Employment Law Team


    Thanks for sharing info..but is there any other statement of word to be used instead of “lieu of notice”? What is the language for “lieu”?

  • Cynthia Hereford

    Good resource
    Thank you

  • Recep

    I was looking for an explanation of the term “salary in lieu of notice” and found the explanation here quite helpful. Thanks for the info!

  • admin

    You will be paid but dont have to go back to work. You will however be taxed in the normal way for any payment in lieu of notice.

    Employment Law Team

  • admin


    If you stil require advice, please call 0207 488 9947
    RT Coopers Employment Team

  • sharon wills

    My contract of employment has been terminiated during a 6th month probationary period. The letter in which informs me of this decision states it is due to poor attendence and the possibility that I may have been involved in setting off fire alarms within the nursing home in which I was employed.

    Are you able to advise me on the above information or do you require more information. Please confirm receipt of this message and let me know.

    Sharon Wills

  • tania brown

    i have been sacked & the wording in the letter staes “4weeks notice in lieu of pay” , what does this mean??

  • admin


    Did your boss give you a reason for firing you? Payment in Leiu of Notice means that you are being paid upfront and do not have to work your notice period. The reason for your dismissal is very important and the length of time of your service.

    If you need to come in for a meeting call us on 0207 488 9947 or send us an email to requestimng a meeting. We would then advise you on costs.

    Employment Team.

  • Mike Maly

    I was fired on Monday via email and in the email my boss used this phrase ‘in mieu of notice’ saying that there would be money deposited in my account at the end of the month. I did not quit,I was fired.
    If I accept this money, am I agreeing with her statement that I quit? Will it effect my applying for unemployment?
    Please advise.

  • Nikki

    I feel I allready have been informed about this topic
    at work yesterday by a friend, but at that time
    it didn’t caugh my attention.

  • csuffTidoTielo

    Thank you very well read allss textt about drsating and ilike it very much

  • XRumerTest

    Hello. And Bye.

  • KattyBlackyard

    Hi, interest post. I’ll write you later about few questions!

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