Notice period

A notice period is the window between the moment a termination is announced and the moment the employment relationship legally ends.

For global payroll and EOR teams, notice is the line where the termination timetable meets statute, and statute wins. Anyone modelling exits on a flat four-week assumption is modelling the wrong number in every country that is not the United States.

The length is set by three sources at once: the employment contract, the statutory floor in the country of work, and any applicable collective bargaining agreement. The longest of the three normally wins. Civil-law countries step notice up with tenure; common-law countries cap or rely on the contract.

Two mechanisms collapse the calendar when timing matters more than the notice salary. Payment in lieu of notice (PILON) ends the relationship immediately and pays the notice salary as a lump sum. Garden leave keeps the employee on payroll but bars them from working. Both are EOR-administered in most multi-country setups; the decision between them stays with the buyer.

What does a notice period mean in payroll?

A notice period is the window between the moment a termination is announced and the moment the employment relationship legally ends.

The length is set by three sources at once: the employment contract, the statutory floor in the country of work, and any applicable collective bargaining agreement or industry convention. The longest of the three normally wins.

Two further mechanisms collapse the calendar. Payment in lieu of notice (PILON) ends the relationship immediately and pays the notice salary as a lump sum; see the payment in lieu of notice entry for the tax mechanics. Garden leave keeps the employee on payroll but bars them from working, used most often to protect customer relationships or stop a competitor recruiting them.

Notice runs in both directions. The employer-to-employee notice is what most exit conversations focus on. The employee-to-employer notice, when a worker resigns, controls how much warning the employer gets before a role goes vacant.

Treat notice period as a calendar instrument, not just a salary line. The number that matters most is the date the seat empties, not only the cost of the weeks between now and then.

What triggers a notice period, and when does it disappear?

Notice obligations attach to almost every termination, but four scenarios shorten or remove the window entirely.

The probation trigger has the tightest window. Germany's BGB §622 sets probation notice at two weeks; France allows 24 hours' notice in the first week and 48 hours after that, rising to two weeks after one month. The probation cap usually expires at six months.

Dismissal with cause for gross misconduct allows summary dismissal with zero notice in most countries. The threshold is high, and the burden of proof sits with the employer in every civil-law country covered here; see the EOR compliance entry for how that evidence burden interacts with vendor-administered exits.

Mutual termination by agreement short-circuits the statutory notice in exchange for a signed release. France's rupture conventionnelle and Germany's Aufhebungsvertrag both compress the calendar in exchange for a settlement payment above the statutory severance floor.

Employee resignation carries its own notice rule, almost always shorter than the employer-side obligation. UK ERA 1996 sets employee statutory notice at one week irrespective of tenure; Germany allows four weeks from the employee unless the contract specifies longer.

Confirm which trigger applies before drafting the letter. The wrong trigger can convert a clean exit into a procedurally invalid dismissal with the full notice bill back on the table.

How long is notice actually, by country and tenure?

The numbers cluster around tenure-stepped scales in civil-law countries and flat or capped scales in common-law ones. The dataset at severance, notice, and statutory leave by country tracks the live statutory floors across 40 countries.

Two patterns dominate. Civil-law systems step the notice up with tenure, so a senior leaver costs more in calendar days than a junior one. Common-law systems either cap notice or rely on the contract, leaving the contract drafter responsible for the number.

The German seven-month ceiling at 20 years catches more headcount-reduction models off guard than any other notice rule in our coverage. The Germany country guide walks through the BGB §622 ladder in operational detail.

Read the contract first, the statute second, the convention third. The binding number is whichever is longest.

When should you pay in lieu and when should you serve out the notice?

Notice cost shows up in four distinct places on the P&L, only one of which is the headline salary line.

Worked notice keeps the leaver on payroll with full salary and benefits, and continues to accrue employer contributions. Productivity in the notice window is typically half or less of normal, especially in roles where customer continuity is at stake.

PILON ends the employment immediately and pays the notice salary as a lump sum. Tax treatment varies sharply: HMRC under the Post-Employment Notice Pay (PENP) rule taxes PILON as ordinary earnings since April 2018, while French indemnité compensatrice de préavis under the Code du travail is taxable in full but exempt from some social charges. PILON also accelerates cash outflow into the current pay period.

Garden leave keeps the employee on payroll, with benefits, and bars them from working or contacting clients. The cost is identical to worked-notice cost on payroll but adds zero output. It is the right tool when the leaver is heading to a competitor or holds customer relationships the business needs to migrate before the exit lands.

Replacement overlap is the cost line modelling teams miss most often. If the replacement hire starts before the notice ends, both salaries run simultaneously, and the monthly invoice carries two seats for the overlap. Senior hires with long German or French notice periods often produce two to three months of dual-running cost that nobody scopes upfront.

Statutory benefits keep accruing across the overlap on the leaver's side; see the statutory benefits entry for the country-by-country accrual list.

What goes on the notice-period operational checklist?

Notice cost and notice risk are mostly determined by the work People Ops does in the week before the conversation, not the week after.

Confirm the binding notice length first. Pull the contract, the statutory floor for the country and tenure, and the applicable collective agreement. Set the leaver's last day on the longest of the three.

Decide the worked-versus-garden-versus-PILON route at the same time. The decision drives the local payroll cycle, the tax treatment, and the equipment-recovery window.

Time the notice letter to the local payroll cutoff. UK RTI requires the final FPS on or before the last payment date; German Lohnsteuer reporting runs on a monthly cycle; Italian UniEmens submissions close on the last day of the following month. A notice letter issued the day after cutoff pushes the formal exit into the next reporting period.

Sequence the IT and access offboarding to the worked-notice route. A worker on garden leave should lose system access on day one of notice; a worker continuing to work needs access until the last day, with a clean handover plan attached.

Process the accrued leave payout through the same payroll cycle as the final salary. Most countries require untaken statutory holiday to be paid at exit. Bundling it with notice pay simplifies tax treatment and avoids a separate post-cessation FPS or equivalent filing.

Fix the reference policy before the leaver asks. A neutral factual reference (dates of employment, role title, last salary) is the standard defensible position in every country covered here. Anything beyond that opens the door to defamation or misrepresentation claims that long outlast the notice window.

Notice period FAQs

Is a notice period legally required?

In most countries, yes. The UK, Germany, France, Brazil, Spain, and Italy all set statutory minimum notice periods that apply when the contract is silent or specifies less.

The US is the major exception: at-will employment carries no statutory notice for individual dismissals, with the WARN Act applying only to mass layoffs above 50 or 100 employees at a single site.

How long does notice run for in Germany?

BGB §622 sets a tenure-stepped ladder. Probation notice is 4 weeks; after probation, notice rises from 1 month to 2 months at 5 years, 3 months at 8 years, 5 months at 12 years, and 7 months at 20 years of service.

The ladder catches more German exit cost models off guard than any other notice rule in Europe. See the Germany country guide for operational detail.

What is the difference between notice, PILON, and garden leave?

Notice is the calendar window between announcement and end date. PILON ends the relationship immediately and pays the notice salary as a lump sum.

Garden leave keeps the worker on payroll for the full notice window but bars them from working. The three have identical headline cost in most countries but very different operational and tax mechanics.

Does an Employer of Record run the notice cycle?

Yes for the payroll mechanics. The EOR drafts the notice letter to local format, runs payroll across the notice window, processes PILON through the right tax mechanism, and remits final social charges.

The buyer keeps the substantive decisions: worked vs garden vs PILON, replacement-hire timing, equipment recovery, and reference policy. Most providers charge a coordination fee on top of the standard monthly seat fee during a notice cycle; see the best EOR providers shortlist.

What happens to notice when the employee resigns?

Employee-side notice is shorter than employer-side notice in every regime covered here. UK ERA 1996 sets employee statutory notice at 1 week irrespective of tenure. Germany allows 4 weeks from the employee unless the contract specifies longer.

The contract can extend the employee notice in exchange for the corresponding extension on the employer side, but cannot extend it unilaterally below the country's reasonableness test.