Why use this calculator
Employers consistently underestimate tribunal claims because they think about them as a bet on the merits, and the economics do not work that way. There are no tribunal fees for the claimant, and costs orders against a losing claimant are rare, so an employer with a strong defence still pays its own legal fees and loses weeks of management time preparing witness statements and attending a hearing.
That expenditure is unrecoverable whatever the outcome, which is why claims with little merit still settle. This calculator makes that asymmetry explicit by showing the cost of winning next to the cost of losing, and by converting the award into an expected value weighted by your honest view of the claimant's prospects, which is the number to compare a settlement offer against.
How to use it
- Select the type of claim, since the financial rules differ sharply between them: unfair dismissal is capped, discrimination is not and adds an injury to feelings award, and a wages claim recovers only the sum withheld.
- Enter the employee's gross annual salary, their complete years of continuous service and their age, which together drive the statutory basic award.
- Enter how many weeks of loss the claimant is asserting, then say whether you are instructing solicitors or handling it in house.
- Finally give your honest assessment of the claimant's chance of success, because a defensible claim and a hopeless one produce very different expected values from the same headline award.
What each result means
- Expected cost of defending
- The probability-weighted award plus the fees and management time you pay regardless. Compare any settlement offer against this figure, not against the headline award.
- Likely award if the claim succeeds
- What the tribunal might order if the claimant wins outright. It excludes any Acas Code uplift, which can add up to a quarter.
- Basic award
- The statutory element of an unfair dismissal award, calculated exactly like redundancy pay from age, service and capped weekly pay.
- Compensatory award
- Compensation for actual financial loss. Capped on an unfair dismissal claim, entirely uncapped on a discrimination claim.
- Injury to feelings
- Available only on discrimination claims, compensating distress rather than financial loss. It is payable even if the claimant lost no money.
- Your legal costs
- Your own fees. Tribunals order costs only for unreasonable conduct, so you will not usually recover these even after a complete win.
- Management time
- The internal cost of witness statements, disclosure and attendance. It is real expenditure that rarely appears in any legal budget.
- Total cost if you lose
- Award, fees and management time combined. This is the downside figure for a board paper or a litigation reserve.
- Cost even if you win
- What a complete victory still costs. This is the number that explains why weak claims settle so often.
- Settle-now break-even
- Roughly the point below which settling during Acas conciliation beats defending, since early settlement avoids most of the preparation cost.
The formula
For unfair dismissal, basic award = capped weekly pay x weeks earned from age and service
Compensatory award = weekly pay x weeks of loss, limited to the lower of 52 weeks' pay or £123,543
For discrimination, the compensatory award is uncapped and the middle Vento band midpoint is added as injury to feelings. For a wages claim, recovery is weekly pay x weeks withheld to a maximum of 12. Legal costs are the greater of £12,000 or 25 per cent of the award when represented, and £1,500 when not. Management time is taken at 8 per cent of salary.
Expected cost = award x prospects of success + legal costs + management time
How this number is used in practice
Employment tribunals are a no-costs jurisdiction. Unlike the civil courts there are no fees to bring a claim, and costs orders against a losing claimant are made only where the claim was vexatious, misconceived or conducted unreasonably, which is a high bar reached in a small fraction of cases.
The practical consequence is that a claimant risks their time but very little money, while the employer faces unrecoverable fees from the moment a claim form arrives. That asymmetry is the single most important fact in deciding whether to defend, and it is the reason Acas conciliation resolves so many claims that an employer believes it would win.
Which claim is pleaded matters enormously. An unfair dismissal claim is capped at the lower of a year's pay or the statutory maximum and needs two years of service. A discrimination claim has no cap, needs no qualifying service, can be brought while still employed, and adds an injury to feelings award starting at over a thousand pounds even for a single incident.
The same set of facts pleaded as discrimination rather than dismissal can be worth several times as much, so a claim form alleging both should be assessed on the discrimination limb first.
Two adjustments sit outside the arithmetic and both favour a well-run employer. A tribunal can increase an award by up to twenty-five per cent where the employer unreasonably failed to follow the Acas Code on discipline and grievance, and reduce it by the same margin where the employee did.
A Polkey reduction cuts the compensatory award by the chance the employee would have been dismissed anyway had a fair procedure been followed. Employers that hold a proper hearing, take notes and offer an appeal routinely convert a large claim into a modest one on those two points alone.
Worked examples
Unfair dismissal by a 44-year-old on £42,000 with 6 years' service claiming 26 weeks' loss, 50% prospects
Expected cost of £28,676, of which £15,360 is payable even if the employer wins outright
The same facts pleaded as discrimination rather than unfair dismissal
The award rises past £46,000 once injury to feelings is added, and the expected cost climbs with it
A weak unfair dismissal claim with 10% prospects, defended with solicitors
Expected cost is still £18,023, because the £15,360 of fees and management time is unrecoverable
When people use it
- Deciding whether to defend a claim or settle during Acas early conciliation
- Setting an authorised settlement range before a conciliation call
- Building a litigation reserve in the accounts for a live tribunal claim
- Showing a board why a weak claim is still worth settling
- Comparing the cost of a settlement agreement against the cost of a contested hearing
Tips
- Tribunals are a no-costs jurisdiction. Winning does not get your legal fees back, which is why weak claims still have settlement value.
- Check whether discrimination is pleaded. It is uncapped, needs no qualifying service and adds injury to feelings, so it dominates the valuation.
- Follow the Acas Code: hold a hearing, take notes, offer an appeal. Failing to do so can add 25 per cent to any award.
- Acas early conciliation is free and confidential. Settling there avoids nearly all the preparation cost on both sides.
- A settlement agreement can pay the first £30,000 tax free, so the same net sum costs the employer less than a taxed award.
- Count management time honestly. Witness statements, disclosure and hearing attendance routinely consume weeks of senior time.
What it assumes, and where it stops being accurate
- Uses the statutory limits in force from 6 April 2026. Dismissals before that date use the previous year's lower figures.
- Assumes no costs order is made in either direction, which reflects the overwhelming majority of tribunal outcomes.
- No Acas Code uplift, Polkey reduction or contributory fault deduction is applied, though each can move the award by up to a quarter.
- Discrimination injury to feelings is taken at the middle Vento band midpoint. A real award could fall anywhere across the bands.
- Management time is estimated at 8 per cent of the claimant's salary, which understates it in document-heavy or multi-witness cases.
- Excludes reputational cost, the effect on other staff and the risk of copycat claims following a public judgment.
Terms used on this page
- No-costs jurisdiction
- A forum where each side bears its own legal costs regardless of who wins.
- Acas early conciliation
- The free, mandatory attempt at settlement before a tribunal claim can be filed.
- Injury to feelings
- Compensation for distress in discrimination claims, set by reference to the Vento bands.
- Polkey reduction
- A cut to the compensatory award reflecting the chance of dismissal even after a fair process.
- Settlement agreement
- A binding waiver of employment claims requiring independent legal advice to be valid.
Questions people ask
- Can I recover my legal costs if I win at tribunal?
- Rarely. Employment tribunals are a no-costs jurisdiction, and costs are awarded only where a party acted vexatiously, abusively or unreasonably, or brought a misconceived claim. Orders are made in a small minority of cases, so both sides normally pay their own fees whatever the outcome.
- What is the cap on unfair dismissal awards?
- The compensatory award is capped at the lower of 52 weeks' gross pay or £123,543 for dismissals from 6 April 2026, so most claimants are limited by their own salary first. The basic award is separate and capped at £22,530. Discrimination claims have no cap at all.
- How long does a tribunal claim take?
- A straightforward unfair dismissal claim commonly reaches a hearing in six to twelve months. Discrimination claims involving multiple witnesses and lengthy disclosure often run beyond eighteen months. Acas early conciliation must be attempted first, which adds an initial period but frequently avoids a hearing.
- Does the claimant pay anything to bring a claim?
- No. Tribunal fees were abolished after the Supreme Court found them unlawful, and they have not been reintroduced. A claimant risks their time and, in rare cases, a costs order for unreasonable conduct, but faces no fee to start or continue a claim.
- Is a settlement cheaper than winning?
- Frequently yes. Because you cannot recover your legal fees or management time even after a complete win, an early settlement at or below the cost-of-winning figure leaves you better off in cash terms and removes the risk of losing entirely.
- What is a settlement agreement?
- A binding contract in which the employee waives their claims in return for a payment, valid only if they take independent legal advice, which the employer usually funds. The first £30,000 of genuine compensation is normally free of income tax, so it is efficient for both sides.
Use this with
Employment Tribunal Cost Estimator answers one part of the question. These pick up where it stops: Unfair Dismissal Compensation Calculator, Discrimination Compensation Calculator, Litigation Cost Estimator and Statutory Redundancy Pay Calculator.
Where these figures come from
Figures and rules on this page follow United Kingdom law.
- The Employment Rights (Increase of Limits) Order 2026. The statutory instrument setting the limits used here, in force 6 April 2026
- GOV.UK: Calculate your statutory redundancy pay. Official redundancy entitlement tool and the age-banded weeks table
- GOV.UK: Redundancy: your rights. Week's pay cap of £751 and the £22,530 maximum
- GOV.UK: Make a claim to an employment tribunal. Time limits, the claim process and the absence of tribunal fees
- Acas: Settlement agreements. Requirements for a valid waiver and the independent advice condition
Employment Tribunal Cost Estimator produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.