What is a good settlement offer?
A good settlement offer needs to be assessed against your entitlements, potential claims, evidence and the terms you will accept. There is no universal number of months’ salary which makes an offer fair. Two offers with the same headline total can provide very different value.
Separate money owed from additional compensation
Start with a breakdown of salary, accrued holiday, notice and any redundancy entitlement. Then identify the additional settlement amount. Ask which figures are gross, which deductions apply and when payment is due.
For illustration only, an offer of £12,000 comprising £6,000 notice, £1,000 holiday pay and £5,000 additional compensation gives a different comparison from £12,000 compensation plus notice and holiday. This is arithmetic, not a suggested settlement value.
Identify the claim before comparing amounts
A claim assessment begins with the legal issue and evidence. It does not begin by choosing a large figure and looking for a reason to demand it. Record the employer’s alleged failure, the documents supporting it and the issues the employer disputes.
For a financial loss, record the calculation and supporting documents. A future loss estimate needs an explanation of its assumptions. Avoid counting the same loss under several headings merely because more than one claim is being considered.
Compare outcomes, not only totals
An agreed payment offers different certainty from a disputed claim. Consider the amount, payment date, enforceability and obligations as a complete proposal. This comparison does not require assuming the claim will fail or the employer will pay more.
Identify which terms matter to you before negotiating. These could include a reference, agreed wording about departure, the end date or changes to restrictions. An amount may be acceptable while a restriction on your next job remains unacceptable.
Check the assumptions behind a valuation
Ask the adviser which claims have been assessed, what losses are included and which documents support the assessment. Distinguish a possible tribunal award from a negotiating proposal and from an employer’s actual offer.
A calculator can organise an estimate. It cannot determine disputed evidence or the employer’s willingness to settle. If the employer offers a figure without a breakdown, request the components before comparing it with another calculation.
Questions employees ask
Is three months’ salary a good offer? The number alone cannot answer the question. It might include money already owed, or it might be additional compensation. The evidence and obligations still need assessment.
Is a higher offer always better? Compare the complete terms. A higher payment tied to a broader restriction or a different leaving date may not meet your needs.
Is the first £30,000 always tax free? No. Tax depends on the payment category. Earnings and notice pay generally remain taxable. The exemption for qualifying termination payments is not a blanket exemption for the entire agreement.
Get advice on the offer you have received
Accepting an undivided total can conceal the amount paid for settling your claims. A Belonge Case Assessment reviews the offer, contract, pay records and evidence of the underlying dispute. The £149, one hour assessment includes a written report with findings and recommended actions.
Belonge does not provide statutory settlement agreement sign off.