Skip to main content
BeyondGov

Severance pay calculator

Estimate a typical severance package from your salary, years of service, and your employer's weeks-per-year rate, with an after-tax take-home estimate.

Primary sources
DOL and IRS guidance · employer policy, not statute
Privacy
Inputs stay in your browser

Your gross base salary before taxes and deductions.

Length of service
Severance rate

Use the rate in your employer's written policy or offer. If it is unknown, compare several scenarios; there is no universal rate.

Enter a cap only when your employer's policy or offer includes one. Leave blank to model an uncapped scenario.

Your estimated severance and take-home appear here once you enter your salary and length of service.

Are you a federal employee?

Federal severance follows a fixed formula that is different from the private-sector method above. Use the federal calculator for an accurate estimate.

Federal severance pay calculator
How it works

How severance pay is calculated

There is no legal formula for private-sector severance, but most packages follow the same four steps.

  1. 1

    Find your weekly pay

    Divide your annual base salary by 52. That weekly figure is the unit most severance formulas are built on.

  2. 2

    Count your years of service

    Add up your full years with the employer, plus any partial year. Longer tenure means a larger package under a per-year formula.

  3. 3

    Apply the weeks-per-year rate

    Multiply weekly pay by years of service, then by your employer's rate, commonly 1 to 2 weeks per year. This is where policies differ most.

  4. 4

    Check for a cap

    Many policies limit total severance, often around 26 weeks. If your service times the rate exceeds the cap, the cap wins.

Severance FAQ

Common questions

QHow is severance pay calculated?

Most employers use a weeks-of-pay-per-year-of-service rule. You take your weekly pay (annual salary divided by 52), multiply it by your years of service, and multiply that by the number of weeks your employer credits per year, commonly 1 to 2 weeks. Some policies cap the total, often around 26 weeks. There is no single legal formula, so the rate comes from your policy, contract, or negotiation.

QIs severance pay required by law?

Not in the United States. No federal law requires private employers to pay severance. The WARN Act requires 60 days' advance notice of a mass layoff or plant closing at larger employers, but that is notice, not pay. Severance is typically a matter of company policy, an employment contract, or a negotiated separation agreement.

QHow much severance is typical?

There is no universal severance rate. An employer may use weeks of pay per year of service, a flat number of weeks, a negotiated amount, or no severance at all. Use the rate and cap in your employer's written policy or offer. If you do not have those terms yet, compare several scenarios instead of treating one preset as typical.

QIs severance pay taxed?

Yes. The IRS treats severance as supplemental wages, but 22% is an optional flat withholding method for certain separately identified payments—not a universal tax rate. An employer may instead use the aggregate withholding method, and special rules apply above $1 million of annual supplemental wages. The calculator shows one 22%-plus-FICA scenario; wage-base rules, Additional Medicare Tax, and state or local withholding can change the check. Withholding is not your final tax liability.

QCan I negotiate my severance package?

Often, yes. Because severance is usually not a legal entitlement, the initial offer is frequently a starting point. Employees negotiate the number of weeks, continued health coverage, the payout of unused leave, and the terms of any release they are asked to sign. Consider legal advice before signing a separation agreement.

QIs federal severance calculated the same way?

No. Federal employees have a fixed statutory formula (one week of pay per year for the first 10 years, two weeks per year after that, plus an age adjustment over 40, capped at 52 weeks). If you are a federal employee, use our federal severance pay calculator instead of this general tool.

Sources