Settlement Agreement Calculator
Enter the details of your settlement offer and we'll tell you how it compares to what you'd likely receive at tribunal, plus factors that could push your offer higher.
Last updated: February 2026
This tool provides estimates based on current UK employment law. It is not legal advice.
How it works
Enter your settlement details
The offer amount, your salary, length of service, and the reason for leaving. We ask what led to the settlement.
See the comparison
Your offer compared to statutory minimum, typical negotiated range, and potential tribunal award for your situation.
Get your analysis
AI assessment of whether the offer is fair, what factors are in your favour, and whether seeking legal advice could improve the outcome.
What you'll get
Your settlement offer
£25,000
Plus personalised AI analysis of your specific situation, risk factors, and recommended next steps.
What is a settlement agreement?
A settlement agreement (formerly called a compromise agreement) is a legally binding contract between you and your employer. You agree to waive your right to bring certain claims (such as unfair dismissal or discrimination) in exchange for a financial payment and agreed terms.
When are settlement agreements used?
Employers typically offer settlement agreements during redundancy, performance disputes, grievance situations, or when they want to end the employment relationship without the risk of a tribunal claim.
Do I need a solicitor?
Yes — a settlement agreement is only legally valid if you have received independent legal advice from a qualified adviser (usually a solicitor). Your employer is required to contribute towards the cost of this advice, typically £350–500 plus VAT.
How much should I expect?
There is no fixed formula. Typical settlement amounts range from 1 to 6 months' gross salary, depending on the strength of any potential claims, your length of service, and the employer's willingness to avoid tribunal proceedings.
Based on authoritative sources
Frequently Asked Questions
How much should a settlement agreement be worth?
It depends on your situation. A rough guide is 1–6 months' gross salary, but factors like potential discrimination claims, length of service, and the employer's exposure to tribunal risk can push this significantly higher.
Can I negotiate a settlement agreement?
Yes, and you should. The first offer is rarely the final offer. Common negotiation points include the payment amount, reference wording, restrictive covenant relaxation, and the tax treatment of the payment.
Is settlement agreement pay taxed?
The first £30,000 is typically tax-free if it qualifies as a termination payment. Payments for notice period (whether worked or paid in lieu) are taxed as normal earnings. Your solicitor should advise on the tax treatment of each element.
What happens if I reject a settlement agreement?
If you reject the offer, your employer may proceed with the underlying process (redundancy, disciplinary, capability). You retain your right to bring tribunal claims. Sometimes a rejected offer leads to an improved offer.
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