Employment Agreement Cost Calculator

Legal drafting cost is treated as a single fixed expense for preparing the agreement template, so spreading that one fixed cost across more employees who will sign a similar or identical version mechanically shrinks each person's individual share — the total legal spend doesn't change, only how thinly it's divided. This reflects how legal drafting actually works in practice: preparing one well-crafted template for many employees costs far less overall than negotiating and drafting each agreement individually from scratch.

It depends heavily on jurisdiction — some states and countries require compensation during a non-compete restriction period for it to be enforceable at all, or apply much stricter scrutiny to unpaid restrictions, while others don't mandate it but courts are still more likely to uphold a restrictive covenant that includes fair compensation for the employee's restricted period. Given how significantly this varies, confirming your specific jurisdiction's requirements with an employment attorney before finalizing agreement terms is essential rather than assuming any one rule applies everywhere.

They compensate for two different things and often apply in different circumstances — garden leave typically compensates the employee specifically for the period they're restricted from competing after leaving, while severance is a separate payment tied to the termination itself, sometimes owed regardless of whether a non-compete is even in play. Keeping them as distinct line items makes it clear which cost is tied to which contractual obligation, which matters if either provision is negotiated or challenged separately.

Weigh the total cost as a percentage of salary against the actual competitive risk the role poses — a non-compete makes far more financial sense for a senior employee with access to trade secrets or key client relationships than for a role with limited competitive exposure, where a high garden leave and severance cost may not be justified by the protection it actually provides. Courts in many jurisdictions apply similar reasoning, scrutinizing whether a restriction is proportionate to a legitimate business interest rather than simply enforcing whatever the contract says.