Severance Pay Calculator

The most common method multiplies your weekly pay by a set number of weeks for each year you worked. A typical formula is one to two weeks of base pay per year of service. For example, at two weeks per year, ten years of service equals 20 weeks of severance. Some employers cap the total or use a set schedule instead.

In most U.S. jobs, no. Employment is generally at-will and there is no federal law requiring severance. You are entitled to severance only if an employment contract, company policy, collective bargaining agreement, or a separation agreement you sign provides it. The federal WARN Act requires 60 days' notice (or pay in lieu) for certain mass layoffs, which is different from severance.

A common benchmark is one to two weeks of pay for each year of service, though it varies widely by company, industry, and seniority. Executives and long-tenured employees often negotiate more, sometimes several months of pay, while some employers offer a flat amount regardless of tenure.

Yes. Severance is treated as taxable wages. It is subject to federal and state income tax and to Social Security and Medicare taxes, and it is often withheld at the supplemental wage rate. The lump sum can push part of your pay into a higher withholding bracket for that period.

Often, yes — severance is frequently negotiable, especially if you have leverage such as long tenure, a strong performance record, or potential legal claims. Because most severance is offered in exchange for signing a release of claims, it is worth having the agreement reviewed before you sign.

No. This tool gives a rough estimate based on the common weeks-per-year formula. Your actual severance depends on your contract, employer policy, and any agreement you negotiate. Have a licensed employment attorney review a severance or separation agreement before signing.