Question 1

Does GOV.UK or ACAS offer an official settlement agreement calculator?

Accepted Answer

No. Neither GOV.UK nor ACAS provides an interactive settlement agreement calculator. The UK Government provides a basic statutory redundancy calculator, and ACAS provides early conciliation codes of practice. SettlementCheck is an independent ACAS-aligned calculator that estimates your complete package, including non-statutory compensation, notice pay, and tax exemptions under 2026 statutory rates.

Question 2

Is a compromise agreement calculator the same as a settlement agreement calculator?

Accepted Answer

Yes. Under Section 111A of the Employment Rights Act 1996, the Enterprise and Regulatory Reform Act officially renamed compromise agreements to settlement agreements in July 2013. The statutory calculation principles (notice pay, statutory redundancy capped at £751 per week, and the £30,000 tax-free threshold under ITEPA 2003 s.403) apply identically to both.

Question 3

How much tax will I pay on my settlement agreement payout?

Accepted Answer

Under Section 403 of ITEPA 2003, genuine termination payments (such as ex-gratia compensation and statutory redundancy) up to £30,000 are 100% tax-free. Any amount above £30,000 is subject to income tax. Payment in lieu of notice (PILON) is always taxed as ordinary employment income under s.402D.

Question 4

What is an average settlement agreement payout in the UK?

Accepted Answer

A typical UK employee settlement agreement pays between 1 and 3 months of gross salary as ex-gratia compensation, in addition to contractual notice pay (PILON), accrued holiday pay, and statutory redundancy if applicable. The first £30,000 of compensation is tax-free, and employers typically contribute £500 to £1,500 plus VAT toward your mandatory independent legal advice from an SRA-regulated solicitor.

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