Severance Pay Calculator
Put a number on the exit package.
Severance Pay Calculator
Weeks = max(minimum, years x weeks per year); gross = weeks x weekly pay.
Calculated instantly
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What This Calculator Does
The Severance Pay Calculator estimates the number of severance weeks and the gross and net amount from weekly pay, years of service, a policy formula, and a minimum. It is a planning tool for comparing an offer with a policy, not legal advice on entitlement.
How It Works
The policy formula multiplies years of service by weeks per year, then applies the minimum if the result is lower. Those weeks are multiplied by weekly pay to get gross severance. The withholding percentage is applied to estimate tax and deductions, and the remainder is the estimated net. Real withholding depends on the jurisdiction and how the payment is classified.
Example
Six years of service at two weeks per year gives 12 weeks, which is above the four-week minimum. At $1,200 a week, gross severance is $14,400. At an estimated 22 percent withholding, about $3,168 is withheld and the net is about $11,232.
Formula
max(minimum weeks, years x weeks per year)severance weeks x weekly paygross x withholding %gross - withholdingReading the Results
Severance weeks
The policy formula result after applying the minimum. Part years are included as the decimal you enter; many policies round service differently.
Gross severance
The amount before tax. It excludes accrued vacation, unused sick leave, bonuses, and continuation of benefits unless your policy adds them.
Estimated net
Gross minus a flat withholding estimate. It is not a tax return result and may differ from the actual deposit.
Sources and References
US Department of Labor - Severance Pay
When severance pay is required
Explains that severance is generally a matter of policy or agreement rather than a federal statutory minimum.
IRS Publication 15-A - Employer Supplemental Wage Withholding
Tax treatment of severance payments
Severance is generally treated as supplemental wages, with specific withholding methods.
References identify the method or data behind this calculator. Where a standard or tariff changes, the current edition applies, and the assumptions stated above take precedence over a remembered figure.
Frequently Asked Questions
Is severance pay required by law?
In the US, federal law does not require severance pay. It may be required by an employment contract, a union agreement, a company policy, or state law in specific situations such as a mass layoff under the WARN Act. Read the documents that apply to your job.
How is severance taxed?
Severance is generally treated as supplemental wages and is subject to income tax and payroll taxes. The withholding method can be a flat percentage or the aggregate method, so the amount withheld may not match your eventual tax. A tax adviser can estimate the final liability.
Does unused vacation count as severance?
Usually not. Accrued vacation is a separate wage owed under state law or policy, and it may be paid as a lump sum. It should be added to the package but not counted as severance weeks unless the employer says so.
Can I negotiate severance?
Sometimes, especially if you have leverage such as a strong record, pending claims, or a role that is hard to replace. Negotiation may cover weeks, health coverage, vesting, references, and confidentiality. Get any agreement in writing and consider legal advice before signing a release.
How do I compare a severance offer with a new job?
Convert the package to a monthly budget, subtract tax, and divide by your essential monthly costs to see the runway. Then compare the new salary and start date. A larger package with a long non-compete may be worth less than a smaller one that lets you start immediately.