Do employers have to pay legal fees for a settlement agreement?

There is no legal requirement for your employer to pay you legal fees for a settlement agreement. As it is a legal requirement for
you to take advice on the agreement it is normal for your employer to make at least a contribution to these costs. £500
plus VAT is the market rate that is paid.

If your employer pays below the market rate then this may leave you with a shortfall. Legal fees and their amount is often a point of negotiation for a settlement package.

If you get an increased deal often you will need to make a contribution for the time taken to secure this better deal as employers often take the view they should not pay for both that time and the better deal.