Settlement Agreement Employee Legal Costs

There are different types of restrictive agreements, depending on the action an employer wishes to discourage an employee from doing, including: when they work on their dismissal, the payment of the dismissal is automatically deducted through the pay slip. If you intend to pay them instead of termination and you have included in your employment contract a Clause Pilon (Payment Instead of Notice), your termination is subject to tax and social security. If there is no payment in place of the termination clause of your contract, you can agree to pay your termination in gross amount. However, if you normally make these payments in automatic reaction to termination, HMRC may consider this payment taxable. In any case, your employee must generally agree to be responsible for any other taxes or social security contributions due.