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Whenever an employee is going to receive less notice than they are due (either statutory or contractual), payroll should be informed so that they may calculate whether there is any post-employment notice pay (PENP) which will need to be subject to tax. PENP arises when an employee receives no notice, or less notice than is due to them when there employment is terminated. It represents how much basic pay the employee would have received if they had worked the full notice period which they are/were entitled to. PILON stands for Payment in lieu of notice.
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