The settlement agreement may contain post termination restrictions prohibiting the employee from competing or dealing with the employer’s clients and suppliers.
To give effect to these restrictive covenants the employer has to make a payment against the employee’s undertaking, and in the settlement agreement this is expressed as being taxable.
Other elements of the termination package are taxed differently:
The financial package that the employer pays to the employee on termination of employment comprises different elements. It includes, but is not necessarily limited to, the compensation payment. Tax treatment is different for each component of the overall package.:
When are they used? What is in them? Use our guide to understand more about settlement agreements
Depends on a variety of factors. We will advise about the particulars of your situation and explain how much compensation is appropriate
Is a settlement agreement offered when employees are redundant? Find out more on our redundancy pages
We seek to address your legal needs in a way that suits you. For certain matters we can offer a fixed fee arrangement. Learn more about costs with Aeon settlements
Discover more about the terms that the employer will include in the settlement agreement.