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Is your notice pay taxable?
If you work your notice, you will be taxed at the usual rate on the money you earn in your notice period.
If your employer offers you a payment instead of you working your notice this is called ‘PILON’ or ‘payment in lieu of notice’. PILON is only taxable if your employment contract says it is, or it is normal practice in your workplace. Otherwise, it is not taxable.
If the PILON, together with redundancy and other compensation, adds up to more than £30,000, anything over the £30,000 is taxable at the usual rate.