Severance Pay Calculator
Estimate potential severance based on salary, tenure, and common severance assumptions
Severance Pay Calculator
Based on common practice: 1–2 weeks per year of service
Who Should Use This Calculator?
This calculator is designed for anyone who has been or may be affected by a layoff and wants to understand typical severance packages. It's especially useful if:
- •You've just been laid off and received a severance offer you need to evaluate
- •You're preparing for potential layoffs and want to understand what severance might look like
- •You're negotiating severance and want a baseline estimate
- •You need to plan your financial runway after job loss
How This Calculator Works
Input: Annual Salary
Enter your current or most recent annual salary. This is used to calculate your weekly pay amount.
Input: Years at Company
Enter how long you've worked at your current (or most recent) employer. Years of service typically determine severance length.
Calculation Formula
This calculator uses the common industry practice of 1–2 weeks of severance per year of service. It calculates:
- Weekly pay (annual salary ÷ 52 weeks)
- Severance weeks (years of service × 2, capped at 26 weeks)
- Total severance (weekly pay × severance weeks)
Output: Estimated Severance
The calculator returns your estimated total severance, how many weeks that represents, and what your weekly pay amounts to.
Example Scenario
Scenario: Software engineer at a tech company
Weekly pay: $140,000 ÷ 52 = $2,692/week
Severance weeks: 5 years × 2 = 10 weeks
Estimated severance: $2,692 × 10 = $26,920
This estimate can range significantly based on the company's specific severance policy, your role, negotiation, and state laws.
Related Tools & Guides
Frequently Asked Questions
What is severance pay?+
Severance pay is compensation provided by an employer when terminating employment. It typically includes:
- Lump sum payment based on tenure and salary
- Continued salary for a specified period
- Unused paid time off (PTO)
- Extended health insurance or COBRA subsidies
- Outplacement services
Is severance pay taxable?+
Yes, most severance is taxable income. It's subject to:
- Federal income tax withholding
- State income tax (in most states)
- Social Security and Medicare taxes
- FICA taxes if severance is spread over multiple pay periods
Use our Severance Tax Calculator to estimate your net severance after taxes.
Can you negotiate severance?+
Yes, severance is often negotiable, especially if:
- You held a senior position
- You have specialized skills
- The layoff was unexpected or abrupt
- You're willing to accept a longer notice period
- You negotiate in writing before signing any agreement
Pro tip:
Always consult an employment attorney before accepting or negotiating severance.
What does this calculator not include?+
This calculator is a simplified estimate based on common industry practice (1–2 weeks per year). It does not account for:
- Your specific company's severance policy
- State or local severance laws
- Bonuses or commissions
- Stock options or restricted stock units (RSUs)
- PTO payouts
- Signing bonuses or retention bonuses
- Your individual negotiation leverage
How do I use this estimate in negotiations?+
Use this calculator as one data point in your negotiation strategy:
- Compare your severance offer to this estimate
- Research typical packages for your industry and role
- Document your contributions and tenure
- Prepare a counter-offer in writing
- Consult an employment attorney before accepting or negotiating
Where can I find more information about severance laws?+
Resources for severance and employment law:
- Federal: U.S. Department of Labor (dol.gov)
- By State: Your state labor department website
- Legal Help: Employment attorney or bar association referral
- Additional Context: LayoffNext company intel pages for typical packages
Important Disclaimer
This calculator provides simplified educational estimates only. LayoffNext does not provide legal, employment, tax, or financial advice. Severance packages vary significantly by company, role, state, and individual circumstances. Always consult an employment attorney before accepting or negotiating severance. Your actual severance may be higher or lower based on your specific situation, company policy, and applicable state or federal laws.