01/09/2026
๐ท Your settlement agreement includes a compensation payment. Does that mean itโs all tax-free?
Not necessarily. ๐ค
One of the biggest misconceptions around settlement agreements is that the entire payment will automatically be tax-free.
Solicitor, Ravneet explains why itโs important to look beyond the headline figure and understand how different parts of a settlement payment may be treated for tax purposes. ๐
Two employees could have settlement agreements for exactly the same amount, yet ultimately receive different amounts in their bank accounts. It all comes down to how the payment is structured.
Have you ever assumed a settlement payment would be completely tax-free? Let us know in the comments below. ๐๐ป
(This video is for general information only and should not be relied upon as tax, legal, or financial advice. Every situation is different, so you should seek advice from a qualified professional before taking any action.)