Welcome to our Settlement Agreement Calculator, designed to help you understand the potential value of your employment settlement package. If you're facing redundancy or negotiating an exit from your workplace, this tool provides a confidential estimate based on key factors including your salary, length of service, and circumstances of departure. While no online calculator can replace professional legal advice, our tool gives you a starting point to better understand what might constitute a fair settlement under UK employment law. Simply enter your details below to receive your personalised calculation.
A settlement agreement (formerly known as a compromise agreement) is a legally binding contract between an employer and employee that settles any potential employment claims. It typically involves the employee agreeing not to pursue legal action against their employer in exchange for a financial settlement and potentially other benefits.
Settlement agreements are commonly offered during redundancies, workplace disputes, performance issues, or when an employer wishes to terminate employment without following a full dismissal process. They may also be used when an employee is leaving under mutual agreement or taking voluntary redundancy.
No. Redundancy is when your position is no longer needed by the company. A settlement agreement can include redundancy payments, but it's a broader legal document that can be used in many employment termination situations, not just redundancies.
No, accepting a settlement agreement is voluntary. You can negotiate the terms or decline it altogether. However, refusing might mean pursuing any claims through an employment tribunal instead.
Our calculator uses standard formulas based on UK employment law to estimate a reasonable settlement value. It considers factors like your salary, length of service, notice period, and the circumstances of your departure to provide an indicative figure.
The calculator provides an estimate based on typical settlement patterns and legal minimums. Every situation is unique, and actual settlements can vary widely depending on the specific circumstances, the strength of any potential claims, and negotiation skills.
You'll need to provide your annual salary, length of service, contractual notice period, age, and information about your departure circumstances. The more accurate the information you provide, the more useful the estimate will be.
Yes, our calculator processes all information locally on your device. We don't store or share any personal data you enter, ensuring complete confidentiality.
Key factors include your salary, length of service, notice period, age, potential claims you might have (discrimination, unfair dismissal, etc.), and the circumstances of your departure. The calculator considers these standard elements.
A fair settlement typically includes:
The first £30,000 of an ex-gratia (compensatory) payment is usually tax-free. However, payment in lieu of notice, holiday pay, and other contractual payments are taxable. The calculator provides estimates before tax deductions.
Yes. For a settlement agreement to be legally binding, you must receive independent legal advice. Most employers will contribute to your legal costs for this purpose.
Understanding your legal position is crucial. Consider consulting with an employment solicitor before negotiating. Being clear about potential claims, having evidence of any workplace issues, and understanding market standards for settlements in your sector can strengthen your negotiating position.
The calculator provides a guideline based on typical cases. If there's a significant difference, this might indicate room for negotiation. Consider discussing this with an employment solicitor who can provide advice specific to your situation.
While the calculator results can give you a helpful benchmark, every case is unique. Use the figures as a starting point for discussion rather than a definitive value. A solicitor can help you build a more tailored negotiation strategy.