Severance Pay Calculator
Severance Formulas Are Set by Policy, Not by Law in Most Cases
In the United States, there's no federal law requiring severance pay at all — when it's offered, it's almost always governed by a company policy or a negotiated agreement, most commonly structured as a set number of weeks of pay per year of service. This calculator applies that structure directly so you can check a severance offer against the stated formula, or model what a package would look like under a different weeks-per-year rate.
The Formula
Severance = Weekly Pay × (Weeks per Year of Service × Years of Service)
How Tenure Scales the Payout
| Years of service | Weeks of severance | Severance payout |
|---|---|---|
| 1 | 2 | $2,500.00 |
| 3 | 6 | $7,500.00 |
| 5 | 10 | $12,500.00 |
| 10 | 20 | $25,000.00 |
| 15 | 30 | $37,500.00 |
"2 weeks per year of service" is a common company policy figure, not a legal requirement — always check the actual severance policy or agreement for the applicable rate, which varies widely by employer and jurisdiction.
Where This Gets Used
- Reviewing a layoff package — checking that the offered severance matches the stated policy formula before signing a separation agreement.
- Negotiating an exit — using the standard formula as a baseline when asking for an enhanced severance package.
- Financial planning during a transition — estimating how many months of expenses a severance payout will cover.
How to Use This Calculator
- Enter Annual Salary.
- Enter Years of Service.
- Optionally enter Severance Weeks per Year of Service (defaults to 2 if left blank).
- Select Calculate to see the total severance payout and weeks of pay.
Related Calculations
Work out your last official working day with the Notice Period Calculator, or total your tenure precisely with the Work Experience Calculator.