Settlement Agreement Calculator

Settlement Agreement Calculator

The settlement agreement calculator gives you an instant automated calculation of the value of your potential settlement agreement (formerly known as a compromise agreement).

How we calculated your settlement agreement value:

Firstly we assume that you have been employed for over 2 years, that you have either been dismissed or forced to resign, and that you have the evidence to prove that the dismissal (or constructive dismissal if you resigned) was legally unfair.

Detailed calculation breakdown

This figure* assumes that you haven't got another job already. If you get another job then the amount which you would be eligible to receive say from an employment tribunal would be reduced because the lion's share of your compensation relates to loss of earnings whilst out of a job.

  • 1

    We take a starting point of around 2 months' gross income for anyone being forced out of their job, which can be due to a range of reasons.

  • 2

    We add on pay in lieu of notice period. You can find out more about pay in lieu of notice in our in-depth article here.

  • 3

    We then take into account these factors: Number of employees, Age, Number of years worked, Disciplinary, Sick leave, Discrimination, Grievance, Employment status.

* This figure includes a payment in lieu of your notice period, meaning that it assumes that your boss will pay your notice pay but not expect you to work during that time (also known as garden leave).

Case feature breakdown

Add one month's pay increase for over 1000 employees, and half a month for over 100, because bigger companies tend to want to settle cases more.

Add half a month's pay increase for each age group over 50, because it's harder to find a job if you're nearing retirement age, therefore you would get more compensation if successful at an Employment Tribunal.

A slight increase for number of years worked, simply because you've probably forged more loyalty from your employer work, and your level of knowledge about the company might be greater too (and therefore more valuable).

Half a months money decrease for this, as no doubt your employer would try to use this against you (regardless of whether it's justified or not).

Half a month's money increase for this as it is possible that your employer would be willing to pay you a bit extra to leave so that you are not using up their sick pay.

Add a month's money for the purposes of this calculation, (but discrimination is highly dependent on evidence in practice).

Add half a month's money increase for this, as it shows that you are serious and have something to argue about.

We also take into account your current employment status in the formula.

Why do we calculate your settlement agreement value like this?

Employed for over 2 years

Half a month's money increase for this as it is possible that your employer would be willing to pay you a bit extra to leave so that you are not using up their sick pay.

Unfair dismissal, whistleblowing and discrimination

Before you've been there for 2 years you don't have unfair dismissal rights, so they can just simply tell you that you're fired. The situation is different with discrimination and whistleblowing. If you are victimised for these reasons, then you don't need to have 2 years' service, so you could claim in the Employment Tribunal after being employed for just one day.

2 months’ gross income: Ex gratia payment

Why do we have a starting point of 2 months' gross income as an ex gratia payment? Well, we look at what most employees are awarded if they were to win an Employment Tribunal claim. Judges would tend to award you an amount of money to compensate you for your lost wages whilst you tried to find another job. But if you were out of work for say over 6 months, then you would need to have a very good reason for not getting a job in that time. (For example you might be a very specific specialist in your field, or your type of job might be becoming more and more rare.) You would need to produce detailed evidence of your job hunt in order to prove that no jobs were available.

Tax and Settlement Agreements

So on that basis, the maximum which you're likely to receive in a tribunal is 6 months' wages. But you would also be taxed on this after a tribunal, unlike with a settlement agreement whereby the first £30,000 tends to be tax free. So an employment tribunal award might only look like 4 months' wages net to you. So for 4 months' wages net, after a long court battle which could take more than a year (and which you could quite easily lose), it is surely worth agreeing 2 months' money via a settlement agreement, with no risk of losing and no legal costs and stress of a tribunal.

Next steps

If you want to talk to an experienced employment solicitor about the details of your case, and find out how we could help you improve your settlement package. Get in touch on 020 7717 5259, 0800 533 5134 or apply for a free 15 minute consultation.