State pension: Is there any point in me topping up years where I had a National Insurance shortfall?

Pat38493

badmemory said:

PILON is subject to both tax & NI payments.

Does PILON even exist as a legal or tax law concept?  I think as far as the law is concerned, you are still an employee of the company receiving pay under the PAYE system - the employer  just chose not to give you any actual tasks to do during that period?  

On the other side, technically if you get several months of PILON paid at the same time, and you are on a high salary, doesn't this mean you might pay very slightly less NI because NI is calculated on each actual pay cheque that you receive?

p00hsticks

Pat38493 said:

badmemory said:

PILON is subject to both tax & NI payments.

Does PILON even exist as a legal or tax law concept?  I think as far as the law is concerned, you are still an employee of the company receiving pay under the PAYE system - the employer  just chose not to give you any actual tasks to do during that period?  

What you describe is known as 'garden leave' - the employer doesn't require the employee to work whilst serving out their notice period, and the employment contract only ends at the end of the garden leave.

 PILON is different - as the acronym suggests, the employee is given payment for the contracted notice period and the employment contract is terminated straight away

 https://www.acas.org.uk/notice-periods/when-an-employee-is-not-required-to-work-their-notice

Mr.Generous

They do PILON because while on garden leave you still accrue holiday pay and bonuses, you can still have company car / bupa / staff discount etc. If they pay you in lieu of notice thats it. you are gone.