When does the money arrive?

Written from primary sources · Editor-reviewed · Law current as of 19 September 2026

By the exitagreement.co.uk editorial team · Published 19 September 2026 · Last reviewed 19 September 2026 · 7 min read

6 primary sources cited on this page. How we check what is on this site

Short answer On the date the agreement says

There is no statutory payment date. The clause in your agreement is the whole answer, and it usually measures from the later of signature and termination — which is not the same as “after you sign”.

Key points

No Act sets a deadline for paying a settlement sum. The contract does, and you are agreeing to it when you sign.
The usual formula is X days after the later of signature and the termination date. If you sign months before you leave, the second limb is the one that governs.
Payment often gets pulled to the next payroll run, because the contractual part has to go through PAYE.
Payment is frequently conditional — on returning property, on a reaffirmation certificate, on not having breached the agreement.
If it is late, it is a contract debt. The tribunal route is capped at £25,000; above that, it is a court claim.

Why there is no legal answer to this question

People arrive at this page expecting a number, usually because a friend or a forum quoted one. It is worth being clear about why nobody can give you one honestly.

A settlement agreement is a contract. When it is due is a term of that contract, just like the amount. Parliament has never legislated a payment window for settlement sums the way it has for, say, the time limit on bringing a claim. So the only place the date exists is the document in front of you — which means the question “when do I get paid” is really the question “what does clause 4 say”, and it is answerable in thirty seconds by reading it.

What can be said generally is what the drafting convention looks like, because agreements in this market are drawn from a small number of precedents and they tend to share a shape.

The clause, and how to read it

What a payment clause is usually made of

A period. Expressed in days. Calendar days and business days are different things and the clause will say which.
A trigger. Almost always the later of two dates: when the agreement is signed by both parties, and the termination date. The word “later” is the one to look for.
Conditions. Return of property, a signed reaffirmation certificate after termination, no breach of the agreement or of the confidentiality terms.
A method. Through payroll for the contractual part, and often by separate bank transfer for the ex gratia part.
A split. Sometimes the two parts have different dates. That is not a trick; the payroll and the finance team are different systems.

The trap is not the period. It is the trigger. An agreement signed in March for an employment that ends in June pays in June, and it will have said so all along.

Why payroll moves the date

The contractual half of a settlement — notice pay, holiday pay, unpaid wages, bonus — is taxed as earnings and has to be reported through PAYE. That means it goes through a payroll run, and payroll runs on a fixed date each month regardless of what the agreement says.

The practical consequence is that a clause saying “within 14 days” often behaves like “on the next payroll date after 14 days”. If you have a mortgage payment or a rent date that the timing matters for, ask which payroll run it will hit before you sign, not after.

The ex gratia half is more flexible, because it is not earnings and does not have to be reported the same way. Some employers pay it separately and faster; some batch it with payroll for simplicity. How the two halves are taxed.

Not sure what your payment clause actually commits them to?

That is a five-minute question for someone who reads these every week. Your employer usually pays for the advice.

The reaffirmation certificate

If you sign before your employment ends, expect a second signature to be required afterwards. The reason is structural: s.203(3)(b) of the Employment Rights Act 1996 requires the agreement to relate to the particular proceedings, and claims that did not exist when you first signed cannot have been settled by it. A reaffirmation signed after termination sweeps up anything that arose in between.

It is normal and it is not a trap, but it has one consequence worth planning for: payment is usually conditional on it. If you sign the first document, leave, and then do not get round to signing the second, the money does not move. Diarise it.

If the payment is late

Once the agreement is signed and the date has passed, you are owed a debt under a contract. That is a stronger position than the one you were in a week earlier, and there are two routes to enforce it.

The tribunal route is quicker and free to issue, but SI 1994/1623 caps what it can order at £25,000. Above that figure the claim has to go to the county court or High Court.

The same diagram as a table

Enforcement routes for an unpaid settlement sum, England and Wales
Route	Ceiling on what can be ordered	Authority
Employment tribunal contract claim	£25,000	SI 1994/1623, article 10
The county court or High Court	No equivalent ceiling	Ordinary civil jurisdiction

The tribunal route exists because of a pair of 1994 orders that extended tribunal jurisdiction to contract claims arising on termination — one for England and Wales, a separate one for Scotland. Both cap what the tribunal can order.

The ceiling, in the Scottish order’s words (the England and Wales order is drafted the same way):

The Industrial Tribunals Extension of Jurisdiction (Scotland) Order 1994, article 10

An industrial tribunal shall not in proceedings in respect of a contract claim, or in respect of a number of contract claims relating to the same contract, order the payment of an amount exceeding £25,000.

Read the section on legislation.gov.uk

So the shape of the decision is: under £25,000 and arising on termination, the tribunal is quicker and costs nothing to issue. Above it, or for anything the orders do not reach, it is a civil claim. In Scotland that means the sheriff court, and s.39 of the Courts Reform (Scotland) Act 2014 makes the sheriff court the only competent forum for claims up to £100,000.

Separately, if what has not been paid is wages rather than the settlement sum, there is an unlawful deduction claim under Part II of the Employment Rights Act 1996, and it has a short clock.

Employment Rights Act 1996, section 23(2)

An employment tribunal shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with— (a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made.

Read the section on legislation.gov.uk

Three months from the date of the payment from which the deduction was made. That is not long, and it is the reason a late payment is worth acting on in weeks rather than months.

Before you sign, check these five things

Does the period run from signature, from termination, or from the later of the two?
Are the days calendar days or business days?
What conditions attach — property, reaffirmation, non-breach?
Which parts go through payroll, and when is the payroll run?
Is there an interest clause if they are late? If not, is it worth asking for one?

All five are read-and-answer questions, which makes them a good use of a sign-off appointment. What that appointment costs and who pays for it.

Common questions

When do I get paid after signing a settlement agreement?

On the date the agreement says, and nowhere else. No statute sets a payment date for a settlement sum. The agreement itself will contain a clause, normally expressed as a number of days after the later of two events: the date the agreement is signed by both sides and the date your employment actually ends. Read that clause before you sign, because after signature it is the only answer.

Why is the payment so often tied to the termination date rather than the signature date?

Because a payment made while you are still employed is harder to characterise as a termination payment, and because the employer wants you to have left before they pay for you leaving. If you sign in March for an employment that ends in June, a clause tied to termination means you are waiting until June, and that surprises people who assumed signing was the last step.

Can the payment run through payroll?

Yes, and it commonly does, which is why the date is often pulled to the next payroll run rather than falling on the day the clause names. The contractual part of the settlement is taxed as earnings and has to go through PAYE. If timing matters to you, ask before signing which parts go through payroll and when that payroll runs.

What if the employer does not pay on time?

Once you have signed, the sum is a contract debt and you have a claim for it. There are two routes. An employment tribunal can hear a contract claim arising on termination, but what it can order is capped at £25,000 by the 1994 jurisdiction orders. Above that figure, or outside the tribunal's jurisdiction, the claim belongs in the ordinary civil courts.

Can I get interest on a late payment?

Only if the agreement provides for it, or under the general law on late payment, which is a separate question from the debt itself. Well-drafted agreements sometimes include an interest clause; most do not. It is worth asking for, because it costs the employer nothing if they pay on time.

Should I hand back company property before I am paid?

Read the clause. Many agreements make payment conditional on returning property, on signing a reaffirmation certificate after termination, or both. Those conditions are normal, but they mean the payment date is not really a date, it is a date plus a list of things you have to have done.

Will I get a P45 and when?

After your employment ends and the final payroll has been run. The sequencing matters if you are starting a new job: a late P45 can leave you on an emergency tax code with the new employer for a month or two. It corrects itself, but it is worth knowing before it happens.

Is the payment date different in Scotland?

The settlement terms are not — employment law is reserved and the same agreement works the same way. What differs is the court you end up in if the employer does not pay. In Scotland that is the sheriff court, and under s.39 of the Courts Reform (Scotland) Act 2014 a claim up to £100,000 may be brought only there.

Sources cited on this page

Every figure above was read from the source it is attributed to on 19 September 2026. How we check this.