Are you wondering “how much should I get in a settlement agreement?” Our Settlement Agreement Calculator is a free, easy-to-use tool that helps you calculate your potential payout when leaving a job in the UK. This calculator is designed for employees, HR professionals, and executives seeking clarity on settlement agreement compensation. In plain English, we’ll explain how the calculator works, what information you need to provide, and what the results mean – so you can approach your settlement with confidence.
Settlement agreements (formerly known as compromise agreements) are legally binding contracts where you receive a sum of money in exchange for waiving any claims against your employer. Our calculator provides an instant estimate of that settlement package based on key factors like salary, length of service, and notice period. It’s a UK-specific settlement agreement compensation estimator that reflects current employment law (for example, the first £30,000 of many termination payouts can be tax-free). Using this tool can help you determine if your employer’s offer is fair, or calculate a reasonable figure to negotiate for, all in just a few simple steps.
Why trust our calculator? We are an SRA-regulated law firm specialising in settlement agreements, so the calculator is built on real case experience and UK legal guidelines. We know facing a settlement can be stressful, so we’ve made the process as straightforward as possible. The tool is completely confidential and obligation-free. And remember, if you decide to proceed with a settlement, independent legal advice is required by law – which your employer will typically pay for, so getting advice won’t cost you anything. We offer that advice and support (usually at no cost to you) once you’re ready for the next step.
How to Use the Settlement Agreement Calculator
Using the calculator is simple. You’ll need to input a few details about your employment, and the calculator will do the rest. Make sure you have the following information handy:
- Annual Salary (Gross) – Your yearly salary before tax. This helps estimate payments like notice pay and statutory entitlements, since many compensation elements are based on your wage level. A higher salary generally leads to a higher settlement amount (all else being equal).
- Notice Period – The length of notice your employer would need to give you (or pay you in lieu of). For example, 1 month, 3 months, etc. The calculator assumes you receive pay in lieu of notice (PILON) for any unworked notice period. In other words, you get paid for your notice period without having to work during it, which is a common arrangement.
- Length of Service – How long you’ve worked for your employer. This is used to factor in statutory redundancy pay (if applicable) and overall loyalty. In the UK, having at least 2 years of service strengthens your position – you qualify for redundancy pay and unfair dismissal protection, which often leads to a higher offer.
- Age – Your age group, if relevant. Some calculators ask for age because statutory redundancy pay is calculated based on age brackets, and older workers (up to a certain age) may get a higher statutory payment. Age can also affect how quickly you might find a new job, which employers consider in negotiations.
- Redundancy Situation – Whether or not you are being made redundant. If “Yes,” the estimate will include your statutory redundancy pay. If “No,” it focuses on other compensation. (Statutory redundancy pay is a fixed formula based on age, tenure, and weekly pay – our calculator incorporates this for eligible employees.)
- Employer Size – The size of your employer (number of employees). This can influence how willing or able the company is to pay generous compensation. Larger organizations may have set policies and budgets for settlements, while very small firms might offer only the minimum. This factor helps refine the estimate to reflect typical practices for companies of that size.
- Other Factors – The calculator may ask about specific circumstances, such as whether you have lodged a grievance, made a discrimination claim, or if you already have another job lined up. These questions help adjust the estimate. For instance, an ongoing dispute (like a grievance or discrimination issue) might increase your payout slightly due to legal risk on the employer’s side. On the other hand, if you’ve secured a new job, your employer might offer less since you mitigated your loss of earnings.
After entering your information, simply hit “Calculate.” The tool will instantly display an estimated settlement agreement payout. This usually includes a breakdown of components, such as:
- Statutory Redundancy Pay (if applicable)
- Pay in Lieu of Notice (for your notice period)
- Any additional ex gratia compensation (extra lump sum)
You’ll be able to see the total estimated payout and how it’s composed. The result is an estimate of what a fair settlement agreement could be worth in your case. Keep in mind it’s not a guaranteed amount, but a helpful guideline for negotiations.
What Does the Settlement Agreement Calculator Include (and Exclude)?
It’s important to know what’s covered in the calculator’s estimate – and what isn’t – so you have realistic expectations.
Included in the calculation: Our calculator covers the core financial elements of a typical UK settlement agreement, namely:
- Statutory Redundancy Pay – If you’re being made redundant and have 2+ years of service, it calculates your statutory redundancy entitlement. (This is based on your age, years of service, and weekly pay by law.)
- Notice Period Pay (PILON) – Payment for your notice period that you don’t work. The calculator adds your owed notice pay as if you’ll receive it in a lump sum. This ensures your estimate includes the salary you would have earned during notice.
- Ex Gratia Compensation – This is the extra compensation for loss of employment that your employer might offer on top of contractual entitlements. The calculator uses typical starting points (often a few months’ pay) to estimate this figure, adjusting it for factors like length of service, disputes, or company size. This ex gratia portion is usually the amount negotiable between you and the employer.
- Untaken Holiday Pay – Any accrued unused annual leave should be paid out when you leave. Our estimate assumes your employer will pay your remaining holiday entitlement as required by law (often this is just added to your final payslip).
- Basic Bonuses or Commissions Due – If you are contractually entitled to a bonus or commission that has been earned (for example, an annual bonus period that has concluded), this should be factored into your settlement. The calculator will prompt you to include such amounts if relevant, or you can mentally add them. In general, guaranteed bonuses or commissions earned up to your leaving date should be included in your payout.
Not included / Limitations: While the calculator is a powerful guide, it does not account for everything. Notably:
- Tax Deductions Beyond £30,000 – The calculator shows gross amounts. Be aware that under UK law, the first £30,000 of a genuine compensation payment can be paid tax-free, but amounts above that, as well as normal wages (like notice pay or holiday pay), are taxable. The calculator factors in the full amounts but doesn’t perform tax withholding calculations. (For example, if your estimated settlement is £40,000 with £10k of that being notice pay, roughly £30k might be tax-free and £10k taxed as income.)
- Complex Legal Claims – Any value related to specific legal claims (like discrimination, harassment or whistleblowing compensation) is not precisely calculated. These situations can increase your settlement value, but the tool only makes a rough adjustment for them. It can’t predict tribunal awards for things like injury to feelings. For serious claims, you’d discuss value with a solicitor rather than rely on a calculator.
- Non-Financial Terms – The calculator focuses on money. It doesn’t include non-monetary benefits of a settlement agreement, such as an agreed reference, outplacement services, or clauses like confidentiality and restrictive covenants. Those have value to you, but not in pounds and pence, so they’re outside the scope of the payout estimate.
- Employer Variability – Every employer is different in how they approach settlements. The calculator can’t account for a particularly generous employer who might pay above average, or a very tough negotiator who pays bare minimum. It provides an average baseline. Actual offers can vary depending on your employer’s policies and willingness to negotiate.
- Future Benefits or Stock – If you have stock options, equity, or other future entitlements, these are not handled by the general calculator. You would need specific advice on how those are treated in a settlement (sometimes they let you keep shares or get them paid out – this would be negotiated separately).
- Legal Fees – The calculator does not deduct or factor in legal fees. In almost all cases, your employer covers the cost of your independent legal advice on the settlement agreement as a separate payment directly to your solicitor. This isn’t part of your compensation figure, so it’s not shown in the estimate (it’s essentially a bonus benefit – you get free legal advice). We mention it so you know you won’t have to pay that out of your settlement.
In summary, the Settlement Agreement Calculator gives you a solid estimate of the cash you should receive (redundancy pay, notice pay, and extra compensation). It assumes standard scenarios and legal limits. But it’s not a substitute for personalised legal advice – unusual details in your case (like a large bonus due, or a discrimination claim) will need expert consideration beyond the calculator’s scope.
Next Step: Booking Legal Advice (Your Free Consultation)
Using the calculator is a great first step to understanding your potential settlement. Once you have an estimated figure, the next step is to get tailored legal advice. Why? Because a calculator provides a general estimate, but a solicitor can review the specifics of your situation and the settlement agreement draft to make sure you truly get everything you’re entitled to.
Book a free consultation with our expert settlement agreement solicitors to discuss your result and options. We offer a friendly, no-obligation chat to go over your calculator estimate and answer any questions. During this consultation, we can:
- Review the offer your employer made (or is likely to make) and compare it to your calculator result, ensuring it’s fair and meets legal requirements.
- Explain your rights in plain English – for example, your right to statutory payments, what claims you might be giving up, and any tax implications of the payout.
- Negotiate for you if needed. If the calculator suggests you deserve more than what’s on the table, we can help negotiate a higher settlement or better terms. We have extensive experience negotiating exit packages for employees and executives at all levels.
- Handle the paperwork to finalize the agreement. For the settlement to be binding, you must get independent legal advice and have a solicitor sign an adviser’s certificate. We’ll take care of this and ensure the agreement is properly executed. Remember, in most cases this won’t cost you anything – your employer covers our fees for advising you.
By getting legal advice, you’re not only fulfilling a legal requirement – you’re also gaining peace of mind. You’ll know that the amount you’re receiving (as estimated by the calculator or offered by your employer) is the best outcome for you. Our team is regulated by the Solicitors Regulation Authority (SRA) and has helped thousands of clients with settlement agreements, so you can trust that you’re in safe hands.
Ready to proceed? After using the settlement agreement compensation estimator, simply give us a call or fill out our contact form to schedule your free consultation. We’re here to support you through this process and ensure you walk away with a settlement that is fair and in your best interest.
Settlement Agreement Calculator – FAQ
How do I use the settlement agreement calculator?
To use the calculator, input your basic employment details (salary, length of service, notice period, etc.) into each field of the form, then click “Calculate.” The tool will instantly generate an estimate of your settlement agreement payout, broken down into components. Make sure to enter gross (pre-tax) figures for salary and any payments. The more accurate your inputs, the more useful the estimate will be. It’s a simple fill-in-the-blanks process – no special knowledge needed. If you’re unsure about any field (for example, your exact notice period or redundancy status), check your contract or ask HR for clarification before using the calculator.
Who is the settlement agreement calculator for?
It’s designed for anyone involved in an employment settlement situation in the UK. Employees who have been offered a settlement (or are negotiating one) can use it to gauge if the offer is fair. HR managers and employers can use it as a planning tool to calculate a reasonable exit package for an employee. Executives and senior leaders can also input their details to estimate higher-value settlements (such as those involving long service and high salaries). In short, if you want to calculate a UK settlement agreement payout, whether for yourself or to understand what an employee might expect, this calculator is for you. It caters to all levels and industries, from entry-level staff to CEOs, by adjusting for factors like salary and tenure.
How much should I get in a settlement agreement?
There is no one-size-fits-all answer, but your settlement should fairly compensate you for losing your job. Several key factors influence the amount, including your salary, your notice period, your length of service, and the strength of your legal position (for instance, whether the employer has a fair reason to dismiss you or if you could claim unfair dismissal). As a rough guideline, a typical starting point for negotiation might be a few months’ pay – then adjusted up for things like long service or strong claims, or down if the employer has valid reasons for termination. Our calculator takes these factors into account to suggest an estimated payout. Always remember that you may also be entitled to statutory minimum payments (like redundancy pay) and that any unique circumstances (e.g. discrimination claims or outstanding bonuses) can increase the figure. If you’re unsure about what you should get, use the calculator for an estimate and then seek legal advice to refine that number for your specific case.
Are settlement agreement payouts tax-free?
Partially. Under UK law, the first £30,000 of a settlement compensation payment for loss of employment can usually be paid tax-free. This tax-free portion covers genuine compensation (such as an ex gratia payout or statutory redundancy pay). Any amount above £30,000 is subject to income tax. Also, contractual payments like your salary, pay in lieu of notice (PILON), accrued holiday pay, or bonuses are taxable as they would be normally. For example, if your settlement includes £10,000 of PILON and £5,000 of holiday pay, those will have tax and National Insurance deducted just like your regular pay, even if under the £30k threshold (the £30k exemption doesn’t apply to wages). The calculator provides a gross total – it doesn’t do tax calculations – so the estimate may be higher than what you “take home” after tax on certain portions. We can advise you on the tax implications of your specific settlement breakdown during your consultation.
Does the calculator include bonuses or other benefits in the estimate?
The calculator focuses on the main cash elements of a settlement (notice pay, redundancy pay, and core compensation). If you have a guaranteed bonus or commission that you’ve earned and not yet been paid, you should include that information when using the calculator – those payments should be factored into your settlement. In practice, a bonus due for past work would either be paid out separately or incorporated into your settlement agreement. Our tool doesn’t automatically know about such bonuses unless you input them, so be sure to add any owed bonus/commission to the figures. Likewise, any unused holiday entitlement will usually be paid in your final payslip and is part of your overall package, though the calculator may assume this as part of its formula. Remember that bonuses, commissions, holiday pay, and other benefits are typically subject to tax just like normal pay. They may not fall under the £30k tax-free exemption unless explicitly treated as compensation for loss of office (which is rare for these items). If you’re unsure, you can consult us to ensure all your entitlements (monetary and non-monetary) are accounted for in the final agreement.
How accurate is the settlement agreement calculator?
The calculator provides a good-faith estimate based on the information you enter and general UK employment law standards. It’s designed to give you a ballpark figure so you know what to expect. In many cases, it can be quite close to the eventual offer, especially for standard scenarios. However, it’s not perfect – real-life settlements can be higher or lower for various reasons. The tool may not capture every nuance of your situation (for example, your employer’s willingness to be generous, or the exact value of a complex claim). Think of it as a guide, not a guarantee. Its accuracy is highest for typical redundancies or agreed exits where the main components are notice, redundancy pay, and a modest ex gratia sum. The more unusual your case (say, a high potential discrimination claim or a very high salary with long notice), the more your actual negotiated amount might diverge from the raw calculation. Always use the result as a starting point for discussions, then get tailored advice. Our solicitors can often improve on the calculator’s figure by negotiating based on factors the calculator can’t quantify.
Do I still need a solicitor if I use the calculator?
Yes. The calculator is a helpful starting point, but it cannot replace professional legal advice. In fact, to make a settlement agreement legally binding, you are required to get independent legal advice from a qualified adviser (usually a solicitor). The law wants to ensure you fully understand the agreement and your rights before signing. Beyond this requirement, a solicitor adds value by interpreting the calculator’s results in light of your unique circumstances, spotting anything the calculator missed, and negotiating with your employer for a better deal if appropriate. We strongly recommend using the calculator and then consulting a lawyer – especially since your employer will typically pay for the legal advice, so it costs you nothing out of pocket. A solicitor will check that the payout is fair, advise if you could ask for more, ensure the agreement’s terms (like confidentiality or references) are favorable, and handle all the signing formalities. In short, the calculator is the first step to inform you; a solicitor is the crucial next step to protect you.
Who pays for my settlement agreement legal fees?
In the majority of cases, your employer will cover the legal fees for the advice you receive as an employee on a settlement agreement. This is customary in the UK – employers expect to pay a contribution (commonly a few hundred pounds) to ensure you can get the required independent legal advice. The settlement agreement itself will typically state the amount the employer will pay toward your solicitor’s fees (e.g. “the Employer will contribute up to £500 + VAT toward the Employee’s legal costs”). We operate on the basis that this contribution is our fee for standard advice, meaning in most cases you don’t have to pay anything. If additional negotiation or work is needed beyond what the employer’s contribution covers, we would discuss any further costs with you upfront – but often we can ask the employer to increase their contribution if needed. The key point is that getting legal advice should not deter you financially: you get the benefit of expert guidance, and your employer foots the bill as part of the settlement arrangement. This is one of the reasons it’s wise to use a solicitor – you gain professional help at little or no cost to you.