Termination Payments Calculator

Accurate tax and NIC calculations to ensure your compliance and support you through change.
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Why do I need a Termination Payments Calculator?

If your business needs to downsize, restructure or consider redundancies, the tax and national insurance contributions (NIC) complications can add to an already difficult process. Getting it right is critical to avoiding unexpected liabilities, costly mistakes or reputational damage.

When you make a termination payment, getting the tax/NIC right can be a minefield. Each case will be different and ensuring you have clearly understood the facts before calculating any potential tax/NIC liabilities is crucial. These calculations are often made in challenging circumstances for both you and your employees, adding to the pressure of getting them right.

Our bespoke calculator requires no tax technical knowledge to use and removes this complexity, and is designed to ensure your compliance, provide detailed analysis, and an audit trail with a bespoke report that can be shared with the employee. Coupled with expert guidance, it’s your key to making informed decisions with confidence.

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Features and Benefits

Easy to use – no tax or NIC knowledge needed

Save time – generate complex calculations quickly

Ensure compliance – Adhere to latest tax and NIC regulations

What's included?

  • Dynamic questionnaire to reduce data collection time
  • Generate precise calculations based on individual employee data
  • Bespoke reports for each employee
  • Establish the correct UK tax/NIC position for any internationally mobile employees
  • Live updates to the calculator when legislation or case law changes
  • A secure portal for your employee data – you control access
  • The BDO Employment Team are on hand to support you if you need any additional advice.

FAQs

When a payment is made to an employee in connection with or due to their employment termination, it is termed a Relevant Termination Award (RTA). An RTA includes payments made in connection with the loss of employment, with the exclusion of statutory redundancy pay.

The first element of an RTA is the PENP, and this features in most termination payments. It is calculated using a fixed formula, the elements of which can be difficult to determine. The PENP element of an RTA is liable to PAYE and both employees and employers NICs.

Pilons often feature in employment contracts and are an important legal consideration.  From a tax/NIC perspective, any PENP calculation will need to account for the “Pilon” element of a termination payment.

Termination payments that exceed the PENP may qualify for a tax exemption of up to £30,000. However, additional complexities might affect this relief, so it is important to get professional advice.

Input relevant data through an online questionnaire, and the calculator generates a detailed report of the termination payment.

Incorrect calculations can result in penalties, additional tax liabilities, and reputational damage. For SAO businesses, it may also jeopardise compliance credentials.

Yes! Our tool is designed to accommodate a range of scenarios, and our experts are available to provide bespoke advice for more intricate cases.

Not always. For example, if the termination of employment is for medical reasons (physical or mental) then it’s possible a termination payment can be made free of tax or NICs in full.

We can provide advisory services in other jurisdictions. Please contact us to speak to one of our experts.

Termination Payments Calculator Pricing

30 days access Maximum of 5 reports

From £1,500 + VAT

90 days access Maximum of 15 reports

From £4,000 + VAT

365 days access Maximum of 50 reports

From £11,000 + VAT

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How to purchase this tool

Unfortunately, we are unable to enter into an Agreement with you if we find a conflict of interest.

1. Book a demo

Contact us for a no-obligation demonstration. If your organisation requires bespoke features, we will discuss customisation to your unique requirements and provide you with a quote. 

2. Client onboarding and conflict checks

Once you have expressed interest in purchasing access to the tool, as with any BDO service we will commence our client onboarding and conflict of interest checks process.  

Success

We will set up your secure portal, arrange access for relevant staff and make access to the termination payments tool .

Speak to an expert

If you would like a demonstration of our Termination Payments Calculator, or you would like to speak to one of our Employment team, please get in touch and we will be delighted to connect with you.

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