Free HR calculator
Severance Pay Calculator
Estimate a severance package from salary, years of service, and a weeks-per-year policy. Add accrued time off and a benefits subsidy for a fuller picture. This is a single-person estimate. To model a whole reduction with every employee in one place, use the in-depth Excel version.
Before you start
What you will need. Annual salary, Years of service
The person
Policy and extras
Estimated severance pay
The estimate
The method
How severance is estimated
Most severance formulas tie pay to tenure. You pick a number of weeks of pay for each year of service, multiply by the years worked, and apply a cap. This tool turns the annual salary into a weekly figure, applies your policy, and shows the result in dollars, weeks, and roughly months. Add accrued time off and a benefits subsidy and it gives you a fuller package figure.
How this is calculated
What is typical
A common rule of thumb is one to two weeks of pay per year of service. Entry-level and individual contributor roles often sit at the lower end, with managers and directors higher. Executives sit higher still, sometimes at a flat number of months set by contract. Technology and finance tend to run more generous, retail and hospitality less. A cap around 26 weeks is common.
What else is in a package
Beyond the cash, severance packages often include a payout of accrued unused time off. Many add a subsidy toward continued health coverage for a few months, and outplacement support to help the person find their next role. Senior or long-tenured employees sometimes see extended benefits or other enhancements. The mix depends on company policy and the role.
A note on the rules
In the United States there is generally no federal requirement to pay severance. It is a matter of company policy or contract. Separate from severance, the federal WARN Act can require advance notice for larger layoffs, and some states have their own notice or severance rules. Separation agreements usually involve a release and have federal review periods. Because what applies depends on your specifics, treat this as a planning estimate and confirm the rules with an employment attorney.
Carry this into the decision
Model the whole reduction in one workbook
The in-depth Excel version lists every affected employee under one policy, totals the severance, adds accrued time off, benefits, and outplacement, and gives you a board-ready summary for planning.
$29. 30 days. Reply to your receipt or email support@truestephr.com for a full refund. No form or explanation is required, and you keep the files.
Related
More free tools and the notes behind them
Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
Put your own numbers in and read the result on screen.
This tool estimates from the figures you enter. It is general information rather than legal, tax, or accounting advice, so check the result against your own records before you rely on it.