A notice calculation is two sums, not one. The first gives the number of weeks, and it comes straight out of section 86 of the Employment Rights Act 1996 read against your contract. The second turns those weeks into money, and it uses a specific averaging window that is not the same one your redundancy payment uses. Doing them in the wrong order is how people arrive at a figure their employer does not recognise.
Step one of a statutory notice pay calculator: the weeks
Take your continuous service at the date notice is given. Under section 86(1), an employer must give not less than one week where that service is under two years, one week per complete year between two and twelve years, and twelve weeks at twelve years or more. Then read your contract. If it promises more, the contract governs; if it promises less, section 86(3) means the statutory figure applies anyway. The number you end with is the greater of the two, and it is the only input to the second sum.
Step two: what a week is worth
GOV.UK puts notice pay at the average you earned per week over the 12 weeks before your notice period starts. Note the reference point: notice pay looks at the 12 weeks before notice begins, while statutory redundancy pay looks at the 12 weeks before the day you got the redundancy notice. They are often the same week and sometimes are not. Unlike the redundancy calculation, the statutory cap on a week's pay does not apply to contractual notice pay, so a high earner's notice is worth their actual weekly earnings.
Payment in lieu, and what it must include
GOV.UK is specific about payment in lieu of notice: employment can be ended without notice where pay in lieu is in the contract, and you get all of the basic pay you would have received during the notice period. Extras such as pension contributions or private medical insurance come with it where they are in the contract. An employer may still offer pay in lieu even where the contract does not mention it, and GOV.UK says that if you accept you should receive full pay and any contractual extras.
Why the notice element decides the tax
Notice is the part of a termination package that HMRC treats most differently from the rest. The point of separating it before you agree anything is that the sum attributable to notice is taxed as earnings whatever the parties call it, while other termination money can fall under the section 403 threshold. A notice figure you have computed yourself is therefore not just a check on the employer's arithmetic; it is the input to the only tax question that matters in a settlement.
Questions people ask about notice pay calculator
Is notice pay capped like redundancy pay?
The statutory cap on a week's pay drives the redundancy calculation. Notice pay under a contract is based on what you actually earn, which GOV.UK measures as the average per week over the 12 weeks before the notice period starts.
Does pay in lieu include my pension contributions?
GOV.UK says you get all the basic pay you would have received during the notice period, and extras such as pension contributions or private health care insurance if they are in your contract. The contract is what decides the extras, so read the clause before agreeing a figure.
My employer says my notice starts today but my letter is dated last week. Which is it?
It matters, because the 12 week averaging window runs from the start of the notice period and the redundancy calculation runs from the day the redundancy notice was given. Ask for both dates in writing and check the two averages separately rather than assuming one figure covers both.
Is a notice calculator UK enough, or does the contract decide?
Both, in that order. Section 86(1) sets the statutory minimum from continuous service at the date notice is given: not less than one week under two years, one week per complete year between two and twelve, and twelve weeks at twelve years or more. Then the contract is read. Where it promises more the contract governs; where it promises less, section 86(3) means the statutory figure applies anyway. The weeks you end with are the greater of the two, and that is the only input to the second sum.