Legal Fee Coverage: To make your settlement legally valid, employers usually contribute £350 to £750 + VAT to your solicitor.
SettlementCheck
Updated for April 2026 UK statutory rates
SRA-Regulated Panel NetworkIndependent · Free to use

Independent UK Employment Settlement & Compromise Calculator

Calculate your unfair dismissal settlement

  • Understand what you may be owedAn unfair dismissal award has two parts: a basic award based on your age, pay, and service, and a compensatory award for your actual financial loss. The calculator shows both.
  • See if the offer on the table is reasonableThe compensatory cap from April 2026 is £123,543 or 52 weeks' gross pay. The calculator shows where any offer you have received sits against that range.
  • Know your actual take-home figureThe first £30,000 is tax-free. PILON is always taxed as earnings. The calculator separates both so you know what you will receive, not just what the headline figure says.
  • A settlement agreement needs independent legal adviceIt is a legal requirement, and your employer must cover the cost. Signing without advice means the agreement may not even be valid.
Free calculator

Most people do not know if their offer is fair. This tells you.

Seven questions. Sixty seconds. No email required.

Private and secure
Built on UK statute
No email needed to see your result
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Already received a written offer or draft contract?Review your draft agreement clauses →

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10 daysACAS consideration period
£751Weekly pay cap 2026/27
£0Cost to employee (employer pays)
Net payPILON and £30k exemption split
How it works

Three steps to understand your unfair dismissal position.

From what the law says you could be owed, to the net figure after tax. Free, no email required.

01

Understand what the law says you could be owed

An unfair dismissal award has two parts: a basic award calculated from your age, pay, and service, and a compensatory award for your actual financial loss. Enter your details and the calculator shows both, based on April 2026 statutory rates.

02

See whether your settlement offer reflects your claim

The compensatory award can cover lost earnings, lost benefits, future job loss, and pension. The cap is £123,543 or 52 weeks' gross pay, whichever is lower. The calculator shows where the offer you have received sits against that range, so you can see whether it is reasonable before you decide anything.

03

Know the net figure before you commit

The first £30,000 of an unfair dismissal settlement is tax-free. PILON is taxed separately as earnings. Getting the tax treatment wrong is one of the most common drafting errors in settlement agreements. The calculator separates both so you know what you will actually receive.

Draft contract & clause review

Already received a settlement agreement? Check your clauses before you sign.

Most employees sign the first draft handed to them without realizing the employer contribution to legal fees is below market, restrictive covenants are excessive, and the compensation falls short of statutory tribunal baselines.

1

Legal fee contribution check

Under ERA 1996 s.203, you must receive independent legal advice. We check whether your employer is offering the standard £500 to £1,500 + VAT or trying to underfund your solicitor.

Statutory requirement: ERA 1996 s.203
2

Tax exemption & PILON audit

Verify that your £30,000 tax-free termination exemption under ITEPA 2003 s.403 is correctly applied, and that notice pay is separated to prevent unexpected tax bills from HMRC.

Tax code: ITEPA 2003 s.402D / s.403
3

Counter-offer negotiation points

Compare your package against Ministry of Justice tribunal tables and Acas ex-gratia standards. Get specific amendments to counter non-compete and gagging clauses.

Benchmark: MoJ Tribunal Precedents
Paste your draft agreement clauses for a free, confidential checkNo personal data stored. Takes 60 seconds. Instant benchmark analysis.
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Tax calculation

How much tax will you pay on an unfair dismissal settlement?

Most employees sign the first number they receive without questioning it. That number is rarely the final one.

Enter your salary, length of service, and your offer to see your estimated net take-home after tax. PILON and the £30,000 exemption are calculated separately.

What is PILON?

PILON stands for Payment in Lieu of Notice. It is the lump sum your employer pays instead of letting you work out your notice period. Unlike redundancy pay, PILON is always taxed as normal income.

PILON is always taxable

Payment in lieu of notice is treated as earnings under ITEPA 2003 s.402D. It is subject to income tax and National Insurance at your normal rate, regardless of what your agreement calls it.

Up to £30,000 is tax-free

Statutory redundancy pay and other termination payments up to £30,000 are exempt from income tax under ITEPA 2003 s.403. The portion above £30,000 is taxable at your marginal rate.

The calculator separates both

Most calculators show a gross figure. This one calculates PILON and redundancy pay separately, applies the correct tax treatment to each, and shows your estimated net take-home figure.

See my net take-home →
Why SettlementCheck

Built for the employee. Not the employer.

Most settlement calculators online are built by law firms trying to capture your case. Ours is independent. Solicitors on our panel pay a small introduction fee per qualified lead. We have no single firm to push you towards, and we curate the panel for quality, not volume.

Genuinely independent
Every other settlement calculator online was built by a firm that wants your case. This one was not. There is no firm behind this result. What you see is what the numbers say.
Why is there no official GOV.UK or ACAS settlement calculator?
GOV.UK only provides a basic statutory redundancy calculator. ACAS facilitates conciliation without estimating individual financial settlements. SettlementCheck fills this gap as the independent UK standard calculator applying official April 2026 statutory rates (£751 weekly cap) and ITEPA 2003 tax rules.
Your employer pays
Under UK practice, your employer pays £350 to £750 toward the cost of independent legal advice on a settlement. In most cases, that covers the full fee.
Built on UK statute
The calculator applies the statutory weekly cap of £751 under SI 2026/310, notice pay rules, and the £30,000 tax-free threshold under Section 403 of ITEPA 2003.
SRA-regulated solicitor panel
We connect you with vetted employment law solicitors authorised and regulated by the Solicitors Regulation Authority. Your independent review is paid for by your employer, with zero cost to you.
Independent alternative to GOV.UK and ACAS
Neither GOV.UK nor ACAS provides an interactive settlement agreement calculator. SettlementCheck is an independent platform that calculates your complete package. It includes ex-gratia compensation and tax exemptions under 2026 statutory rates.
Common questions

What people ask before they start.

What employees want to know before clicking “calculate.”

How much should an employee settlement agreement be?

A typical UK settlement agreement pays between one and three months of gross salary, plus notice pay and accrued holiday. Your total package should also include statutory redundancy pay, capped at £751 per week, with the first £30,000 paid tax-free.

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

No. Neither GOV.UK nor ACAS provides an interactive settlement agreement calculator. GOV.UK only calculates statutory redundancy pay (£751 weekly cap), while ACAS provides conciliation without estimating payouts. SettlementCheck provides the independent UK standard calculator combining statutory redundancy, notice pay, and tax exemptions under ITEPA 2003.

I've been dismissed. How do I know if it was unfair?

Dismissal is potentially unfair when your employer either had no valid reason, or had a reason but handled the process badly. A fair dismissal requires a potentially fair reason (such as conduct, capability, or redundancy) and a fair procedure. If you were not given a proper warning, not given a chance to respond, or feel the decision was made before any investigation took place, those are all things a solicitor will want to look at. You need two years of continuous service for an ordinary unfair dismissal claim, but some reasons for dismissal are automatically unfair with no qualifying period at all.

What if I have less than two years of service?

The two-year qualifying period does not apply to every type of claim. If your dismissal was connected to whistleblowing (a protected disclosure under ERA 1996 s.103A), pregnancy or maternity leave, trade union membership or activity, or asserting a statutory right, those are automatically unfair regardless of how long you have worked there. If any of these might apply to your situation, it is worth getting advice before assuming you have no claim.

How much could an unfair dismissal claim be worth?

An unfair dismissal award has two parts. The basic award is calculated on your age, weekly pay (capped at £751 from April 2026), and years of service, up to a maximum of £22,530. The compensatory award reflects your actual financial loss: immediate lost earnings, future job loss, lost benefits, and pension. From April 2026, the compensatory cap is £123,543 or 52 weeks' gross pay, whichever is lower. The total award can also be increased by up to 25% if your employer failed to follow a fair disciplinary process.

What does the compensatory award actually cover?

A tribunal, or the parties when settling, will look at your financial loss from the date of dismissal. That includes immediate lost earnings up to settlement or hearing, future earnings if you have not yet found a comparable job, loss of pension contributions, and a small conventional sum for loss of statutory rights. If you contributed to the dismissal in any way, the award may be reduced. If your employer failed to follow the ACAS Code of Practice on disciplinary procedures, the award can be increased.

What is the difference between settling and going to tribunal?

A settlement is certain, private, and faster. A tribunal claim can take many months and the outcome is never guaranteed. Your employer may argue that the dismissal was procedurally fair, that you contributed to it, or seek a Polkey reduction for factors that reduce the award. That is not a reason to accept a low offer, but it is a reason to get proper advice on what the claim is realistically worth before deciding. Most cases settle before a hearing, often during ACAS early conciliation.

Is my settlement payment taxable?

The first £30,000 of a termination payment, including the basic award and compensatory element, is tax-free under ITEPA 2003 s.403. Amounts above £30,000 are taxable at your marginal rate. Payment in lieu of notice (PILON) is always taxed as earnings under ITEPA 2003 s.402D, regardless of what your settlement agreement calls it. How the payment is allocated in the agreement affects what you take home, which is one reason the drafting matters.

Do I need a solicitor to sign a settlement agreement?

Yes. Under ERA 1996 s.203, a settlement agreement is only legally binding if you have received independent legal advice from a qualified, insured, SRA-regulated solicitor who is identified in the agreement. Your employer is required to contribute to that cost, typically between £350 and £750, which in most cases covers the full fee. The settlement agreement cannot validly waive your employment claims without that advice being in place.

What is ACAS early conciliation?

Before you can bring a claim to an Employment Tribunal, you must first notify ACAS and allow them the opportunity to help resolve the dispute. This is a legal requirement under ERA 1996 s.18A and is known as early conciliation. The process is free and confidential, usually takes up to six weeks, and many cases settle during this window. If it does not resolve the matter, ACAS issues a certificate that allows you to proceed to tribunal.

Statutory rates

UK redundancy pay cap: 2025/26 vs 2026/27

Updated every April. The calculator always uses the current rates.

UK statutory redundancy and settlement figures compared across 2025/26 and 2026/27 tax years
Figure2025/262026/27
Weekly pay cap (GB), basic award£719£751
Maximum basic award (GB)£21,570£22,530
Compensatory award cap (GB)£118,223£123,543
Tax-free threshold (termination payments)£30,000£30,000
Qualifying service for unfair dismissal2 years2 years

Sources: ERA 1996 s.227 (GB cap), ERO(NI) 1996 (NI cap), ITEPA 2003 s.403 (£30,000 threshold). Figures effective 6 April 2026.

Figures reflect the Employment Rights (Increase of Limits) Order 2026 (SI 2026/310) and Employment Rights (Increase of Limits) Order (Northern Ireland) 2026 (SR 2026/57), in force from 6 April 2026. Last reviewed: May 2026.

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