Severance Pay Calculator

Severance pay is weeks of pay per year of service, times your weekly pay.

Severance = weeks of pay per year of service × years of service × (annual salary ÷ 52)

Total = severance + unused PTO paid out + health coverage paid + other lump sums

The first line turns length of employment into dollars, which is how severance usually works: the US Department of Labor notes that severance is usually based on length of employment. Your plan sets the weeks of pay per year. Your years of service can include a partial year, so 4 years and 6 months is 4.5. If the plan has a minimum or a maximum number of weeks, the calculator applies the minimum first and then the cap. The second line adds whatever else the package carries, valued in dollars so you can see one total.

Five years at two weeks per year on $75,000 comes to $14,423.

Those are the numbers the calculator opens with, for an invented employee leaving after five years on a plan that pays two weeks per year of service.

• Weekly pay: $75,000 ÷ 52 = $1,442.31
• Weeks of pay: 5 years × 2 weeks = 10 weeks
• Base severance: 10 × $1,442.31 = $14,423
• As months of salary: $14,423 ÷ $6,250 a month = 2.3 months

Now add the rest of a package. If the employer also pays out 10 unused PTO days, each is worth $75,000 ÷ 260 working days = $288.46, so the payout is $2,885 and the total becomes $17,308. If it also pays 3 months of a $600 monthly health premium, that adds $1,800, for $19,108. Every extra year of service on this plan adds two more weeks, or $2,885, as the chart below shows.

A minimum and a cap change the answer at both ends of tenure.

A plan can put limits on the formula, and they matter most to the people furthest from the middle. A minimum protects someone who joined recently: at one year of service, two weeks per year gives only two weeks, so a four-week minimum doubles it. A cap does the opposite for a long career: twenty years at two weeks per year is forty weeks, and a 26-week cap removes fourteen of them. Enter both limits if your plan has them and leave the fields blank if it does not. The result card says when a limit changed your weeks.

The weeks-per-year figure comes from your employer's plan, not from federal law.

The Department of Labor is plain about this: there is no requirement in the Fair Labor Standards Act for severance pay, and severance is a matter of agreement between an employer and an employee or their representative. So the right number for the weeks field is the one in your plan document, offer letter, contract or handbook. If you cannot find it, ask HR for the formula in writing, along with the start date it counts your service from and whether partial years count. Those two details move the result more than anything you could negotiate later.

Unused PTO, health coverage and a bonus can add more than another few weeks of pay.

• Unused PTO. The calculator values a day at salary ÷ 260, which is 52 weeks of five working days. Enter only the days your employer has confirmed it will pay out. To check how many days you have built up, the PTO accrual calculator works it out from your accrual rate.
• Health coverage. Under COBRA you can usually keep your employer's group health plan for a while after you leave, and the Department of Labor says coverage lasts usually up to 18 months, with certain life events extending it to 36. The catch is the bill: you usually pay the full premium, and a plan may charge up to 102% of its cost. Months of premium the employer agrees to pay are real money, so enter them with the monthly premium.
• Bonus and other lump sums. A pro-rated bonus, a retention payment that was promised, or a lump sum for giving up a claim all belong in the last field.

If you are 40 or older, a release gives you at least 21 days to decide and seven days to change your mind.

A severance offer can come with a release, an agreement that you will not bring claims against the employer. When that release covers age discrimination, the EEOC says the waiver must provide at least 21 days to consider the offer, or at least 45 days when it is part of a group layoff, and the 21-day period starts over if the final offer changes materially. After you sign, you get seven days to revoke your signature, and that period cannot be changed or waived by either side. Use the time to run every version of the offer through the calculator.

A mass layoff at a larger employer comes with at least 60 days of written notice.

The WARN Act requires employers with 100 or more employees to give at least 60 calendar days advance written notice of a plant closing or a mass layoff affecting 50 or more employees at a single site. Those notices are public, which is how the WARN notice tracker lists who filed this month, and the layoffs today page follows the announcements as they land. If your employer has filed one, the notice period is the time to get the plan formula in writing.

The figure to compare between offers is months of salary.

Two offers with different weeks, different health months and different bonuses are hard to compare line by line. Turn each into a total and then into months of salary, which this calculator shows under the headline number. The offer with more months is worth more, whatever the headline weeks say. Keep a copy of the result with the formula and the start date you used, so a reply to HR can point at exact numbers.

Severance prices an exit a company chose, and resignations are the exits it did not.

For an employer, severance is one line in the cost of a separation, and it is the predictable one: a formula, a date and a signature. The exits that cost more are the ones nobody planned, when someone the team relies on resigns and the search starts from zero. The turnover cost calculator puts a number on those. TeamPredict works on that side, reading public LinkedIn signals to flag resignation risk early, so a manager hears about a likely departure while there is still time for a conversation.