Formula Used
Annual salary = Monthly salary × 12
Weekly salary = Annual salary ÷ 52
Daily rate = Annual salary ÷ Paid working days
Notice pay = Monthly salary × Notice months
Leave pay = Daily rate × Unused leave days
Service payment = Min weekly salary or weekly cap × Weeks allowed per year × Years of service
Expected claim value = Possible claim value × Success probability
Base gross = Notice pay + Leave pay + Bonus + Ex gratia + Arrears + Service payment + Benefits + Legal fees + Expected claim value
Risk adjusted gross = Base gross × (1 + Risk adjustment ÷ 100)
Taxable amount = Max(0, Risk adjusted gross − Tax free allowance)
Estimated net settlement = Risk adjusted gross − Tax − Deductions − Early payment discount
Negotiation target = Risk adjusted gross × (1 + Negotiation buffer ÷ 100)
Settlement Planning Overview
A settlement agreement figure should connect numbers with practical context. It may include notice pay, unpaid wages, unused holiday, bonus rights, service compensation, legal fees, and extra goodwill money. Each item should be entered separately. Clear separation makes negotiation easier and reduces double counting.
Key Money Components
Start with regular pay. Monthly salary is converted into annual, weekly, and daily rates. Notice pay uses the agreed notice period. Leave pay uses unused days and the paid working day basis. Bonus, commission, arrears, benefit replacement, and legal cost support are added as direct amounts. Service payment can be estimated with years worked, weekly pay, a weekly cap, and weeks allowed per year.
Risk And Claim Value
Many agreements include uncertainty. A claim may have value, yet the outcome is never guaranteed. The calculator uses probability to create an expected claim value. It then applies a risk adjustment. A positive adjustment can reflect strong evidence, delay, or reputational concerns. A negative adjustment can reflect weak evidence, urgency, or a lower appetite for dispute.
Tax And Net View
Gross settlement figures can look attractive. Net figures are often more useful. The calculator deducts an estimated tax charge after any tax free allowance. It also subtracts employee deductions and optional early payment discounts. This gives a practical net estimate for planning. Actual tax rules can vary by country, contract terms, and payment type.
Negotiation Use
The negotiation buffer creates a target figure above the adjusted estimate. It is not a guarantee. It gives room for counteroffers and compromise. You can compare several scenarios by changing one assumption at a time. Save the results as CSV or PDF for review. Keep notes beside each offer, especially where tax, risk, or notice terms are uncertain.
Good Practice
Use recent payslips and contract terms. Check bonus clauses and holiday records. Separate taxable and non taxable items where possible. Ask a qualified adviser before signing. This tool supports planning only. It does not replace legal, tax, or financial advice. A careful worksheet can still make discussions clearer, faster, and more balanced. Review figures with written offer before signing. Store signed copies for records. Update assumptions carefully when employer wording changes or new evidence appears unexpectedly.
FAQs
What is a settlement agreement figure?
It is an estimated amount offered to resolve employment, contract, or dispute matters. It can include notice pay, unpaid wages, leave, bonuses, compensation, legal fees, and agreed extra payments.
Is this calculator legal advice?
No. It is a planning tool only. Settlement terms can depend on contract wording, local law, tax rules, evidence, and negotiation strategy. Always seek qualified advice before signing.
Why include a success probability?
Probability helps estimate uncertain claim value. A claim worth 10000 with a 50% success chance has an expected value of 5000. This supports realistic negotiation planning.
What does risk adjustment mean?
Risk adjustment increases or decreases the base figure. Use a positive value for stronger claims or delays. Use a negative value for weak evidence, urgency, or compromise.
How is notice pay calculated?
Notice pay is calculated by multiplying gross monthly salary by the number of notice months. If notice is paid weekly, convert monthly salary into weekly salary first.
Why does the net figure differ from gross?
The net figure deducts estimated tax, employee deductions, and any early payment discount. Gross figures can look higher, but net figures show practical expected value.
Can I use different tax rules?
Yes. Enter your own tax free allowance and estimated tax rate. The calculator uses those inputs. Actual treatment may differ by jurisdiction and payment category.
Why add a negotiation buffer?
A buffer creates room for counteroffers. It gives a target above the adjusted estimate. The final accepted amount may be lower after discussion and review.