What is an ex-gratia payment under a settlement agreement?

An ex-gratia payment is a non-contractual payment – something beyond your entitlement to incentivise you to sign away your rights under a settlement agreement. It is tax free (for the first
£30,000) but is often subject to a tax indemnity (see here).

It can include your statutory redundancy payment in a redundancy situation but it must be more than that. Ex-gratia means something extra they are giving you that you are not entitled to.