Employee Settlement Agreement Template Uk

3.2 The Employee is responsible and shall indemnify the Employer against any other income tax or social security contributions for the Employees (as well as any interest, costs, penalties or expenses related to a tax assessment) that the Employer is required to pay or make liable for the Employer`s payments to the Employee under this Agreement in excess of an amount deducted, and must compensate the Employer for these, that it pays the employer immediately upon written request. at the source. In this context, the employer is considered to be required to pay such an amount if it receives a written request from HM Revenue and Customs. Schedule 1 (Calculation of Statutory Severance Pay) – This meets the employer`s legal obligation to provide the employee with a breakdown of how a statutory severance pay (if any) was calculated. If no severance pay is paid in accordance with clause 3.1.1, delete all list 1, renumber Schedules 2 and 3, and update all cross-references to Schedules 2 and 3 of the agreement (sections 3.3, 5.1 and 9.1). In our brief, in clause 3.3, we indicated that the termination payment and the issuance of the P45 to the employee are made simultaneously, so that the P45 can take into account the termination payment (and the taxes due on it, if any). If the termination payment is less than £30,000 (and therefore non-taxable), it makes little practical difference for tax purposes if it is paid by the employer before or after the P45 is issued. However, if the payment has to be made after the P45 is issued, this poses a problem for taxpayers with a higher tax rate. The “0T” tax legislation that now applies to post-P45 severance pay will in many cases put the taxpayer in a worse situation at a higher rate, as the employer will have to deduct even more tax rates than they would normally under the PAYE (the employee can recover this later when they file their tax return with HMRC, but he will immobilize his money until he can get it back from HMRC).

If you follow our wording in section 3.3, this problem should be avoided. 2. Termination of employment – In clause 2.1, select the option that indicates whether the employee is currently employed or is already a former employee. This should be correct at the time of signing the agreement. In section 2.2, select the options that indicate whether payments and other benefits (“Benefits”) have been paid or are still to be paid – this likely depends on whether the employee is currently employed or already a former employee. In clause 2.2, enter the number of days for which vacation pay will be paid (if applicable) and the total amount to be paid for the holidays. If there was no more holiday, you can “£0 compared to 0 days of exceptional holiday… » put. If too many statutory holidays have been taken, you can change the wording to reflect a deduction for the employee`s excess leave. Some claims of discrimination and workers` rights can only be waived or settled through (a) ACAS arbitration or (b) a settlement agreement that meets the legal criteria.

The requirements of a valid settlement agreement are the same as for compromise agreements. It should indicate the balance due to the creditor, the amount agreed as full and final settlement of the debt and the terms of payment such as the method of payment, the payment schedule and the consequences of late payment. .