Garden Leave Explained: Your Rights and Pay in 2026

Quick answer

Garden leave is when you have resigned or been given notice and your employer tells you to stay away from work during your notice period while keeping you on full pay. You remain employed, so your salary, pension and benefits continue and the pay is taxed normally. You cannot usually take another job until your notice ends.

What garden leave actually means

Garden leave (sometimes written "gardening leave") describes a situation where an employee has handed in notice, or been given notice, but the employer would rather they did not keep working through it. Instead of having you in the office or meeting clients, the employer pays you to stay at home -- tending the garden, as the phrase suggests -- until your notice period runs out.

The crucial point is that you are still employed for the whole of this period. Your contract does not end on the day you stop attending work. It ends on the normal expiry date of your notice. Everything that flows from being an employee continues: your salary, your pension contributions, your private medical cover if you have it, holiday accrual, and your ongoing duties of confidentiality and good faith towards your employer.

Garden leave is most common for senior staff, sales people, and anyone with access to sensitive information, client relationships, or a strong incentive to move to a competitor quickly. By keeping you employed but out of the building, the employer protects its commercial interests during a vulnerable handover window.

Are you still paid -- and how is it taxed?

Yes. Pay is the one thing that should not change. During garden leave you receive your normal full salary and contractual benefits, because legally nothing about your employment status has changed yet. If anything, garden leave is generous from a cash-flow perspective: you are paid in full while doing no work.

Because garden leave pay is ordinary employment income, it is taxed exactly like any other salary. Your employer deducts Income Tax and National Insurance through PAYE in the usual way. There is no special tax treatment.

For the 2026/27 tax year (6 April 2026 to 5 April 2027) the headline figures that affect your deductions are:

The Personal Allowance is frozen at GBP 12,570 until April 2028 and is tapered away by GBP 1 for every GBP 2 you earn above GBP 100,000, disappearing entirely at GBP 125,140. That taper creates an effective 60% marginal band between GBP 100,000 and GBP 125,140, which can matter if garden leave pay lands a large lump of salary in one period.

If you are taxed under the Scottish rates, the bands and percentages differ (starter 19%, basic 20%, intermediate 21%, higher 42%, advanced 45%, top 48%), so check which applies to you.

To see what your garden leave salary actually lands in your bank account after tax and National Insurance, run your gross figure through a take-home calculator:

You can also break the components down separately with the

and tools if you want to understand each deduction.

Garden leave versus payment in lieu of notice (PILON)

The two arrangements are easy to confuse because both can mean you stop working before your contract would otherwise end. The key difference is whether you remain employed.

For an employer, garden leave has a clear advantage: it keeps your restrictive covenants and confidentiality duties alive for longer and delays the moment you are free to join a competitor. For an employee, PILON gives a faster, cleaner break and the freedom to move on. PILON is normally taxable too, so do not assume a lump sum arrives tax-free -- check the figures before you spend it.

Your rights and duties during garden leave

Because you are still employed, garden leave is a two-way street. You keep certain rights and you keep certain obligations.

What you keep

• Full pay and contractual benefits for the whole period.
• Holiday accrual, normally continuing as if you were at work.
• Pension contributions, usually unchanged.
• Your statutory employment rights, since the contract is live.

What you owe

• Your duty of confidentiality and good faith remains in force.
• You generally cannot work for a competitor or start other paid work without permission.
• You may be required to remain contactable or available to answer questions about a handover.
• You may be told to take accrued holiday during the period.

Can you be forced onto garden leave?

In most cases your employer can only place you on garden leave if your contract contains an express garden leave clause. That clause gives the employer the right to require you to stay away while continuing to pay you. Without one, an employer who stops you working may, in some roles, breach an implied right to actually do your job, which can weaken later attempts to enforce restrictions. This is why well-drafted contracts almost always include the clause for senior or sensitive roles.

How garden leave interacts with restrictive covenants

Restrictive covenants are the post-termination restrictions in your contract -- non-compete, non-solicitation of clients, and non-poaching of staff. They are only enforceable if they go no further than reasonably necessary to protect a legitimate business interest.

Garden leave and covenants are linked. While you are on garden leave you are already kept out of the market, so a court asked to enforce a non-compete afterwards may "give credit" for the garden leave time and reduce how long the restriction can run. The overall combined period -- garden leave plus post-termination restriction -- needs to be reasonable. A long garden leave stacked on top of a long non-compete is more likely to be challenged.

If you are negotiating an exit, this interaction is worth understanding. Sometimes a shorter garden leave with a clear covenant is preferable to a long one, or vice versa, depending on your plans.

Practical tips if you are placed on garden leave

1. Confirm the dates in writing -- the start of garden leave and your actual leaving date.
2. Check your pay continues at the normal rate and that benefits and pension are unaffected.
3. Ask whether you must use accrued holiday during the period and how any remaining holiday will be paid.
4. Clarify whether you can be contacted, and whether you may take up any other activity.
5. Get any agreement to be released early, or to start a new role, confirmed in writing.
6. Plan your finances around your normal monthly pay, since the money arrives as usual salary rather than a lump sum.

Because garden leave pay arrives as regular salary, it is straightforward to budget for. Run your gross salary through the

calculator so you know exactly what to expect each month while you wait for your notice to expire.

The bottom line

Garden leave is a relatively employee-friendly way to serve notice: you are paid in full, your benefits continue, and you do not have to work. The trade-off is that you stay tied to your contract -- you cannot simply walk into a competitor's office -- and the arrangement only works smoothly when the contract has a proper garden leave clause. Understand your dates, confirm your pay, check the covenant position, and use a take-home calculator so there are no surprises in your bank account during the period.