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Original poster

To think she’s lying? Or do companies really do this?

189 replies

BlazingSunsh · 23/08/2024 20:10

A friend I have got closer to over recent months told me that she fell out with her employer, a law firm, and was paid 70k if she agreed to leave without further fuss. She was on 90k at the time. The dispute was over her workload/what she had been given and how she felt she had been blocked to progress. The company disagreed but wanted her to leave so apparently offered this? I find this totally unbelievable?! 70k with no tax? Do these things happen?! If so I want to try it as that’s basically two years of my entire income after tax!

OP posts:
EmeraldIsla · 23/08/2024 20:15

BlazingSunsh · 23/08/2024 20:12

@EmeraldIsla for 70k…? 🤔

Plenty in my company been paid a lot more than that!

namenamification · 23/08/2024 20:14

Yes of course it happens, although the amount is taxed as income.

Its usually proportional to salary and of the order of 3months plus payment in lieu of notice, but can easily go up to a years pay.

Can be a lot more if the company knows they are doing something wrong. Eg I got a small fortune when they paid me off for getting pregnant.

EdithWeston · 23/08/2024 20:14

SilverBranchGoldenPears · 23/08/2024 20:12

That amount will be taxed. I may be wrong now but it used to be that the tax free limit was 30k (or thereabouts). I live elsewhere and got 30k (taxed!!) booo. But yes very normal.

It's tax free to the recipient, not because tax is not due but because the employer as part of the agreement undertakes to satisfy all tax liabilities of the payout.

Original poster
BlazingSunsh · 23/08/2024 20:14

@Hectorscalling what on earth

Someone tell me what fuss I have to make to get one of these 😂

OP posts:
3WildOnes · 23/08/2024 20:14

I know a few people who have negotiated deals like this. All high earners in professional roles.

DrFoxtrot · 23/08/2024 20:14

Yes they do, bear in mind she probably had 3 months notice, or so, in her contract so some of the 70k will cover that, and annual leave entitlement. And the rest a payment to go away quietly.

Icanttakethisanymore · 23/08/2024 20:13

Entirely possible, although only 30k would be tax free if it works the same as redundancy.

SapphireOpal · 23/08/2024 20:13

BlazingSunsh · 23/08/2024 20:12

@EmeraldIsla for 70k…? 🤔

That's not a huge amount given she was on 90k. She's not going to be willing to leave for a month's salary is she.

FriendlyNeighbourhoodAccountant · 23/08/2024 20:13

They aren't tax free. Settlement agreements are taxed as usual wages.

What do you mean you want to try it? Settlements that high are usually because the company has been doing something very wrong and would rather settle than be on the receiving end of an employment tribunal. They don't go handing out money willy nilly.

Hectorscalling · 23/08/2024 20:13

Yep. My employer just paid out 90k to the HR Director to get rid of her.

Original poster
BlazingSunsh · 23/08/2024 20:13

@SilverBranchGoldenPears you got 30k?!? Why don’t people try this more often then, these are huge sums

OP posts:
Original poster
BlazingSunsh · 23/08/2024 20:12

@EmeraldIsla for 70k…? 🤔

OP posts:
SilverBranchGoldenPears · 23/08/2024 20:12

That amount will be taxed. I may be wrong now but it used to be that the tax free limit was 30k (or thereabouts). I live elsewhere and got 30k (taxed!!) booo. But yes very normal.

EmeraldIsla · 23/08/2024 20:11

Yes, of course they do. Compromise agreements are very common.

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