Severance Pay Calculator

Almost every severance policy in the US is a variation of one formula. You take a number of weeks of pay for each year you worked there, and you multiply it by your weekly gross pay. Everything else is detail: whether a part year counts, whether bonus and commission are in the weekly figure, and whether there is a cap on the total.

One week per year of service is the baseline most policies start from. Two weeks per year shows up at larger employers and for longer tenures, and senior packages are often written outside the formula entirely as a set number of months. Use the custom option above if your agreement says something else, including half weeks or a different unit.

Not by federal law. No US statute obliges an employer to pay severance, and the Fair Labor Standards Act does not create one either. An obligation exists only where something else creates it: an employment contract, a union agreement, a written company policy, or the separation agreement you have been handed. That is the honest starting point, and it is why the number this tool produces is an estimate of a formula rather than an entitlement.

The federal WARN Act is the piece people most often mistake for a severance right. It requires covered employers to give 60 days of advance written notice before a qualifying plant closing or mass layoff. That is notice, not pay. Where the notice is not given, pay covering the notice period can become the remedy, which is how the two ideas got tangled together. Several states run their own versions with different coverage thresholds and notice periods. All of this is general information, not legal advice, and an employment attorney in your state is the right person to read your specific situation.

Four things move the number more than anything else. None of them are secret, and knowing which ones apply to you tells you where there is room to ask.

Beyond the formula, the parts of a package that are easiest to move are rarely the headline number. Employer paid benefits continuation, the separation date, an agreed reference, and the treatment of unvested equity are all negotiable in a way that a company wide layoff formula usually is not.

A severance agreement is a contract, and the money is normally being offered in exchange for a release of legal claims. Read it as a trade rather than as a gift. These are the points worth working through before you sign anything.

Once the terms are settled, the last piece is the exit itself. Our resignation letter generator covers the letter if you are the one leaving, the PTO calculator values the leave balance that should be settled alongside the package, and best paying jobs is a reasonable place to start if the next move is a change of direction rather than the same role somewhere else.