Settlement agreement calculator

Settlement Agreement Calculator 2026/27

Estimate a settlement agreement value based on statutory redundancy, notice pay and a compensatory element for claims waived. Results update live. Estimates only — obtain legal advice.

Your details

Compensatory element is a midpoint estimate based on typical tribunal awards.
Estimated settlement value
£19,327
Redundancy + notice pay + compensatory element
Notice pay
£10,385
Statutory redundancy
£3,500
Compensatory element
£0
Tax-free portion
£19,327

Full breakdown

ComponentBasisAmount
Notice pay 12 weeks × £865.38/wk £10,384.62
Statutory redundancy 5 years service, age 38 £3,500.00
Compensatory element No claim £0.00
Total estimate £13,884.62
Tax-free element (up to £30k) £13,884.62
Est. tax saving (20% basic rate) £2,776.92
Estimates only. Settlement amounts depend heavily on individual circumstances, claims strength and negotiation. Obtain legal advice before accepting or offering any settlement.
The first £30,000 of a termination payment is generally exempt from income tax and National Insurance. Amounts above £30,000 are taxable; employer NI applies to the excess from April 2020.

Frequently asked questions

What makes up a settlement agreement payment?
A settlement agreement typically includes notice pay, statutory redundancy pay (or enhanced redundancy), and a compensatory element for claims waived. The compensatory amount reflects the strength of any employment claims and the commercial context of the exit.
How much of a settlement is tax-free?
The first £30,000 of a termination payment is generally exempt from income tax and National Insurance, provided it relates to the termination of employment and is not contractual income. Amounts above £30,000 are subject to income tax, and the employer pays National Insurance on the excess from April 2020.
Do I need a solicitor for a settlement agreement?
Yes. A settlement agreement is only legally binding if the employee has received independent legal advice from a qualified adviser, who must sign a certificate confirming this. Employers typically contribute to the employee's legal costs as part of the settlement.

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Written and reviewed by James Whitfield and the editorial team.

Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. We explain the numbers in plain English with worked examples. Editorial standards · About us