Severance Pay Calculator
Estimate the lump sum you could receive in a layoff or separation. Enter your salary, years of service and the weeks of pay granted per year, then press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Base severance by length of service
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How the severance pay calculator works
Severance packages are almost always built on a simple unit: one week of your pay. The tool converts your annual salary into a weekly figure by dividing by 52, then multiplies that by the number of weeks your employer grants for every year you served. On top of that base it adds the value of any unused paid time off and a flat bonus.
The chart shows how the base payout would have grown with each additional year of tenure, which makes it easy to see the effect of a cap. Once your service crosses the cap, the bars stop rising because the package has hit its ceiling.
A quick example
Suppose you earn $78,000 a year, stayed eight years, and your employer offers two weeks of pay per year of service with a 26-week cap. Eight years times two is 16 weeks, which is under the cap, so your base is 16 times $1,500, or $24,000. Add ten unused PTO days worth about $3,000 and the package comes to roughly $27,000 before tax.
Things to keep in mind
This is a planning estimate, not legal advice, and the final number depends entirely on your separation agreement. For your rights around mass layoffs and notice periods, see the U.S. Department of Labor guidance on the WARN Act. To plan how long the payout might last while you job hunt, try our savings goal calculator.
Frequently asked questions
How is severance pay usually calculated?
A common formula is weekly pay times a set number of weeks per year of service. This tool divides your annual salary by 52 to get weekly pay, multiplies that by the weeks granted for each year you worked, and then adds any unused paid-time-off payout and extra bonus.
What does the cap on weeks do?
Many employers limit total severance to a maximum number of weeks no matter how long you stayed. Enter that ceiling in the cap field and the calculator will stop adding weeks once you reach it. Set the cap to zero to remove the limit entirely.
Is severance pay taxed?
Yes. In the United States severance is treated as supplemental wages, so income tax plus Social Security and Medicare are withheld. This estimate is a gross figure before taxes, so your take-home amount will be lower than the headline number shown.
Are employers required to pay severance?
In most cases no federal law forces an employer to offer severance. It usually comes from a company policy, an employment contract, or a negotiated separation agreement. Always read the agreement carefully before signing, since accepting often waives your right to sue.
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