In our settlement agreement calculator (aka compromise agreement calculator) we make the following assumptions:

• That you are an employee;
• That you have been employed by your employer for at least two years; and
• That you have sufficient evidence to show that you have been subjected to an unfair dismissal (or constructive dismissal)

A settlement agreement is a legally binding contract between an employer and an employee, typically used to resolve disputes or bring an employment relationship to an end on mutually agreed terms. In exchange for financial compensation or other benefits, the employee usually agrees not to pursue legal claims against the employer, including situations involving the following types of dispute (among others):

• Redundancy situations at work
• Dismissal after a performance improvement process
• Dismissal due to alleged misconduct at work
• Allegations of discrimination in the workplace
• Allegations of harassment in the workplace

Settlement agreements often cover elements such as redundancy pay, notice period payments, and compensation for potential claims. They may also include non-financial terms, such as confidentiality clauses.

A settlement agreement calculator is a tool designed to help employees estimate the value of a proposed settlement package. It provides insights into the financial components they might be entitled to and assists in assessing whether the employer’s offer is fair and considering how they might wish to respond.

By inputting key employment details, users can generate a compensation estimate that includes redundancy payments, notice pay, untaken leave, and other relevant factors.

A settlement calculator offers a breakdown of what compensation you might receive under a settlement agreement, helping you understand the components and their estimated value – this would normally include what notice pay you would be entitled to, what you could expect as an ex-gratia payment, and what figure you might expect in respect of injury to feelings (if you have been subjected to discrimination, harassment or victimisation).

Using the settlement agreement calculator provides a benchmark for evaluating whether the offer made by your employer is reasonable or if there’s room for negotiation.

By automating the calculation process, these tools save time and reduce the guesswork involved in estimating settlement amounts.

This includes statutory redundancy payments, which are based on age, length of service, and weekly pay. Some employers may offer enhanced redundancy packages.

Employees are entitled to receive payment for their notice period if they are not required to work it. This may be paid as a lump sum or included as part of the settlement. You will need to check your contract of employment to understand what period of notice you are entitled to.

Payment for any unused holiday entitlement should be included in the settlement agreement.

If your employment contract entitles you to bonuses or commissions, these should be factored into the settlement.

Some agreements may include compensation for employer pension contributions (that would have been earned during the notice period and, sometimes, further into the future).

Statutory rights are the minimum entitlements under the relevant statutory law (such as, for example, the Employment Rights Act 1996 or the Equality Act 2010), while contractual rights are agreed upon in your employment contract.

Settlement agreements should account for both statutory and contractual rights.

The first £30,000 of a settlement payment may be paid tax-free if it is paid as compensation for termination of employment. However, other elements, such as notice pay, holiday pay, bonus etc. are typically subject to tax and National Insurance deductions.

he duration of your employment plays a role in determining whether you are entitled to redundancy pay (and, if so, how much) and other compensation.

Statutory redundancy payments are calculated based on age brackets, with different multipliers for each age range.

Senior roles or roles with specialized skills may attract higher settlements due to contractual complexities, as well as other factors.

Some industries, such as (for example) the financial services industry or pharmaceuticals, typically pay more in compensation under settlement agreements to their employees. This is a general rule, and not universal, but can be helpful.

If you have existing claims or disputes, such as discrimination or unfair dismissal, these may increase the potential settlement value for your employer – whether it will increase the value, and by how much, will depend on how much your employer wishes to avoid an Employment Tribunal claim being brought, what the value of your potential claim is, and what claims you may have.

Enter key details such as your salary, how long you have worked for your employer, and your age.

The calculator will estimate amounts for redundancy pay, notice pay, and ex-gratia pay.

Review the breakdown of the total estimated settlement amount to understand its components.

Settlement calculators help clarify what you may be entitled to, reducing uncertainty during negotiations.

Having an estimate allows you to have a good understanding of what is commonly paid, on average, in a settlement negotiation, gives you confidence that they can negotiate their settlement offer, and provides leverage during discussions with your employer.

The calculator simplifies complex calculations, saving time compared to manual estimations.

The settlement agreement calculator does not include figures in respect of: holiday pay; commission; bonus; or any other contractual sum that you might be due under your contract of employment (except for notice pay, which is factored in).

Calculators typically do not account for the specific value complex legal claims, such as discrimination or harassment – we give a rough guide as to the range of compensation that you could potentially expect, but not a specific figure.

Although we can offer a rough guide as to what you could expect on average in most settlement agreement negotiations, the amount that can in fact be obtained will depend on the position that your employer takes – if they’re inclined to be generous, you may get more than what we would normally expect; if they wish to be difficult about the figures then you may obtain less. Your employment lawyer will normally only know how generous or difficult your employer wants to be once the negotiations have gone through one or two rounds.

While calculators provide useful estimates, they may not capture every nuance of your situation. You should not rely on them as an authority on what you can receive, and you should take the benefit of formal expert legal advice when dealing with settlement agreements (after all, your employer will normally pay for the cost of this!)

No. Calculators are helpful tools but cannot replace professional legal advice. We always recommend that you obtain expert advice from an experienced employment lawyer before starting negotiations with your settlement agreement.

No, the results are for informational purposes only and are not legally binding.

If you become aware that your employer might have a protected conversation/without prejudice conversation with you then you should speak to an expert settlement agreement lawyer in order to obtain an understanding of what your situation is, the nature of the offer being made, and next steps. We offer a free initial consultation for settlement agreements and a fixed fee service for advice.

Our employment lawyers have decades of experience with advising on, and negotiating, settlement agreements – they’ll explain the whole of your settlement agreement to you and make sure you fully understand what you’re signing, before you sign it.

An expert employment lawyer can help you negotiate the terms of the settlement agreement that you are offered in order to try and obtain the best possible deal for you.

Settlement agreement solicitors can also advise you on the non-financial terms in your settlement agreement, including (but not limited to):

• Confidentiality clauses
• References
• Announcements

Post-termination restrictions (e.g. non-compete clauses, non-solicitation clauses)

You can compare the settlement calculator’s estimate with your employer’s offer (but, again, always seek advice from an employment solicitor and don’t just use the calculator as a guide).

Make sure you fully understand what your employer is offering you. Once you understand the offer make a list of key negotiating points for you and what you want from the negotiations (in both financial and non-financial terms); then start negotiating with your employer (whether you do the negotiations or you instruct a solicitor to do it for you).

• Confidentiality clauses
• References
• Announcements

Post-termination restrictions (e.g. non-compete clauses, non-solicitation clauses)

Seek legal advice to ensure your settlement agreement fully protects your rights and interests.