Settlement agreement calculator

Written from primary sources · Editor-reviewed · Law current as of 19 September 2026

By the exitagreement.co.uk editorial team · Published 19 September 2026 · Last reviewed 19 September 2026 · 8 min read

9 primary sources cited on this page. How we check what is on this site

Most calculators in this market give you one number and ask for your email address first. One number is the wrong shape for this answer — a settlement has two halves that are taxed under completely different rules — and holding it back behind a form helps us rather than you. So: two parts, both shown, no form in the way.

What this works out, and what it cannot

Exact: statutory notice pay, statutory redundancy pay including the age bands and the 2026/27 cap of £751, holiday pay on the days you enter, and where the £30,000 threshold falls.
Estimated: the negotiated compensation for loss of employment, as a range, from a scoring rule we publish in full.
Not estimated at all: injury to feelings. It only exists where there is a discrimination claim and it is set by published guidance bands on the facts. A formula would be a guess wearing a suit.

Why the figure splits in two

Every settlement agreement pays you for two different things at once, and they behave differently in every way that matters — how they are taxed, how much room there is to argue about them, and what evidence moves them.

Two offers with the same headline total can be worth very different amounts after tax, because only the second part can use the threshold. Ask which figure sits in which part before you compare anything.

The same diagram as a table

Worked example of a two-part settlement figure
Part	What it covers	Amount	Tax treatment
Part 1 — contractual	Notice pay, holiday pay, unpaid wages, bonus or commission	£8,400	Income tax and National Insurance in full
Part 2 — ex gratia	Statutory redundancy pay, compensation for loss of employment, injury to feelings	£21,000	First £30,000 free of tax and National Insurance
Total	—	£29,400	—

Threshold figure: Income Tax (Earnings and Pensions) Act 2003, s.403(1). Illustrative amounts.

Part one: what you were owed anyway

Notice pay, accrued untaken holiday, unpaid wages, a bonus or commission already earned. None of this is compensation. It is money that would have reached you if the employment had simply run its course, and an employer who does not pay it is not driving a hard bargain, they are withholding wages. Acas lists these as the items from which tax and National Insurance are usually deducted: wages or salary owed to you, bonuses, commission, holiday pay for leave you did not take, payment in lieu of notice (pilon).

The negotiating room here is thin, because the amounts are whatever the contract and the calendar say they are. The one genuine variable is the notice: your contract may give more than the statutory minimum, and the statutory minimum is only a floor.

Employment Rights Act 1996, section 86(1)

The notice required to be given by an employer to terminate the contract of employment of a person who has been continuously employed for one month or more— (a) is not less than one week’s notice if his period of continuous employment is less than two years, (b) is not less than one week’s notice for each year of continuous employment if his period of continuous employment is two years or more but less than twelve years, and (c) is not less than twelve weeks’ notice if his period of continuous employment is twelve years or more.

Read the section on legislation.gov.uk

Part two: what losing the job is worth

Statutory redundancy pay where the dismissal is a redundancy and you have at least 2 years’ service, plus an ex gratia payment for loss of employment. This is the half that is genuinely being negotiated, and it is the half the £30,000 threshold attaches to.

Statutory redundancy pay is calculated from three inputs and nothing else: your age, your years of service and a week’s pay. GOV.UK sets the rates as half a week’s pay for each full year worked while under 22, one week’s pay for each full year from 22 to 40, and one and a half weeks’ pay for each full year from 41. Service counts for a maximum of 20 years, and a week’s pay is capped at £751 for 2026/27, giving a statutory maximum of £22,530.

The cap is the whole reason the statutory number is a floor

If you earn more than £751 a week, every pound above it is invisible to the statutory formula. Someone on £80,000 with fifteen years’ service is entitled to exactly the same statutory redundancy payment as someone on £39,052 with the same service and the same age. Whatever the first person has actually lost, the statute does not see it — which is what the negotiated half is for. How far the cap bites varies by city.

What actually moves the negotiated half

The honest answer is: the cost and risk of the claim you are being asked to give up. An employer is not buying your goodwill, they are buying certainty, and certainty is worth roughly what the uncertainty would have cost them. That is why the factors on step three matter more than length of service does.

Why each factor on step three changes the number
Factor	What it changes
Discrimination	No qualifying service is needed, compensation is not subject to the unfair dismissal cap, and injury to feelings is available on top. Structurally the most significant thing on the list.
Whistleblowing	Also a day-one right, also uncapped. Adds a detriment claim that can survive the dismissal claim.
Registered disabled	Opens reasonable adjustments and discrimination arising from disability, and makes a short consideration deadline harder for the employer to defend.
Grievance raised	Creates a documented dispute. That matters both evidentially and for whether the conversation was protected in the first place.
Performance improvement plan	Cuts both ways. It is the employer building a record — and it is also the strongest available sign that the outcome was decided before the process ran.
Disciplinary process	Changes the alternative. If the realistic alternative to settling is dismissal for misconduct, the offer is worth less; if the process looks predetermined, it is worth more.
Tribunal claim already started	The most direct of the lot. The employer is now paying legal costs whether or not they win, and costs are rarely recoverable in the employment tribunal.

How to use these in an actual negotiation.

Want the figure checked by someone who can see the document?

Send your postcode and the calculator's numbers travel with the enquiry. Your employer usually pays for the advice.

What the calculator deliberately leaves out

Pension. Employer contributions during notice, and whether the agreement deals with them, can be worth more than the ex gratia payment for someone close to retirement. It is too scheme-specific to estimate.
Share options and long-term incentives. What happens to unvested awards is set by the plan rules, and the plan rules usually say “good leaver” or “bad leaver” in a way that is itself negotiable.
Restrictive covenants. Releasing or shortening a non-compete has real value and no published price.
The reference. An agreed reference costs the employer nothing and is routinely given away in exchange for nothing.
The maximum compensatory award. We could not read the current statutory maximum out of a primary source on the day this site was built, so no page here states one. Why that matters.

Common questions

How much should I get in a settlement agreement?

There is no formula. Two parts of the figure can be calculated exactly — statutory notice under s.86 of the Employment Rights Act 1996 and, in a redundancy, statutory redundancy pay under s.162 — and those set a floor. Everything above that floor is negotiated, and what moves it is the strength and the cost of the claim you are giving up. A grievance on file, a discrimination element or a live tribunal claim all move it; length of service and the size of the employer move it less than people expect.

Is the calculator's number what I will actually get?

No. The statutory elements are exact. The negotiated element is a range produced by a published scoring rule, set out in full on our methodology page, and it is not calibrated against real settlement outcomes for the simple reason that settlement agreements are confidential documents and that data does not exist publicly. Use the output as a way of structuring a conversation, not as a target.

Why does it ask my age?

Because statutory redundancy pay is age-weighted. Each full year worked while under 22 is worth half a week's pay, each year from 22 to 40 is worth one week, and each year from 41 is worth one and a half. Two people with identical service and identical salaries can be owed very different statutory amounts.

Why is my salary capped in the calculation?

Statutory redundancy pay is worked out on a week's pay capped at £751 for 2026/27. Above that figure the extra does not count towards the statutory calculation at all. That is why the statutory number is a floor rather than a valuation, and it is why higher earners have proportionally more to gain from the negotiated part.

Does the calculator include tax?

It shows you where the £30,000 threshold falls but it does not deduct tax, because the deduction depends on your other income in the tax year and on the post-employment notice pay rules. Part 1 is taxed as earnings in full. Part 2 can use the threshold. The split matters more than the total.

What about injury to feelings?

It only arises where there is a discrimination claim, and it is set by published guidance bands on the facts rather than by any formula. We do not output a figure for it. If you tick a discrimination factor the calculator flags that the element exists and stops there, which is honest rather than helpful — it is a question for a solicitor who has read the facts.

Do I have to give my details to see the result?

No. The result renders as soon as you finish the last step and there is no form in front of it. The enquiry form sits underneath, and if you use it the figures are attached automatically so you do not have to repeat them.

Sources cited on this page

Every figure above was read from the source it is attributed to on 19 September 2026. How we check this.

Settlement agreement calculator