Pilon

Instead of requiring an employee to continue working during their notice period or being placed on garden leave, a Pay In Lieu Of Notice (PILON) clause gives employers the option to pay the employee a lump sum and terminate the contract straight away. The payment could be in the form of salary only, salary and benefits, salary and bonus etc ­ whatever the PILON clause specifies. A payment made under a PILON clause will be considered contractual and the Revenue will expect to receive tax on it, even if the amount is less than £30,000.