What Is Garden Leave?

Garden leave (also "gardening leave") is a period during which a departing employee continues to receive their full salary and benefits, but is required to stay away from the workplace and is prohibited from starting a new job — effectively pausing your financial runway clock entirely.

Definition

The term originated in the UK, where the idea is that during the notice period, an employee is sent home to "tend their garden" rather than remain in the office with access to clients, colleagues, or proprietary information. In practice, garden leave is a contractual arrangement that protects the employer's business interests while honoring the employee's right to compensation during the notice period.

Garden leave typically arises when an employee gives notice of resignation to join a competitor, or when an employer wants to remove a departing executive from sensitive information without the acrimony of an immediate termination. During garden leave, you remain a current employee: you cannot work for anyone else, you cannot solicit clients or colleagues, but you receive full pay and benefits.

In the US, garden leave is specified in employment contracts and is most common in financial services, technology, and senior executive roles. It is distinct from the WARN Act's notice period, which is employer-imposed; garden leave is often triggered by the employee's own notice of resignation.

How It Affects Your Financial Runway

Garden leave is the most favorable pre-departure scenario for your runway. You are fully compensated — no income gap — while the employment relationship continues. Your savings are untouched. Your benefits continue. When garden leave ends and your actual unemployment begins, your runway clock starts with your savings fully intact, and you've added months of paid time to pursue job searching or planning.

For runway calculation purposes: the garden leave period does not consume your savings. Calculate your runway from the date your last paycheck arrives — that's when the real clock begins.

Worked Example

3-month garden leave at $7,000/month. All income continues, all benefits continue. Savings of $28,000 completely untouched during this period. After garden leave ends: $28,000 ÷ $4,200 burn = 6.7 months of true runway.

Without garden leave (immediate termination with same savings): same 6.7 months. But the 3-month period provided paid job-search time worth $21,000 in income — effectively prepending 3 free months to the clock.

Frequently Asked Questions

Is garden leave common in the United States?

Less so than in the UK. In the US, it appears most often in financial services, technology, and senior executive employment contracts where protecting client relationships or proprietary information is a priority. It must be specified in your employment contract — it is not implied or required by law.

How does garden leave differ from severance pay?

During garden leave, you are still a current employee receiving ongoing salary and benefits — the employment relationship continues. With severance, you are a former employee receiving a final payment. Both provide income after your last working day, but garden leave preserves active employment status and benefits while severance follows termination.