Severance Pay Calculator
Just laid off or facing termination? Estimate how much severance pay you may be entitled to — based on your salary, years of service, and company policy.
Severance pay is not required by U.S. federal law, but most employers use a formula of 1–2 weeks of pay per year of service. An employee earning $60,000/year who worked 5 years could expect $5,769–$11,538 in severance. Your actual amount depends on your employment contract, company policy, and your ability to negotiate.
- No federal law requires severance pay — it is governed by company policy or your employment contract.
- The standard formula is 1–2 weeks of base salary per year of service.
- You almost always have 21 days to review a severance agreement before signing.
- The WARN Act may entitle you to 60 days of pay if your employer failed to give proper layoff notice.
- Severance is ordinary taxable income — plan accordingly.
Severance Pay Calculator
Fill in your details — results appear instantly below.
Is Severance Pay Required by Law in the United States?
No — federal law does not require severance pay. The Fair Labor Standards Act (FLSA) contains no severance requirement. It is entirely a matter of employer policy, your employment contract, or what you negotiate.
However, these legal exceptions matter:
- The WARN Act: Requires employers with 100+ employees to give 60 days’ notice before a plant closing or mass layoff. Failure to comply may entitle workers to up to 60 days of back pay. [U.S. Department of Labor]
- Employment contracts and handbooks: If severance was promised in writing, your employer is generally legally bound to honor it.
- State WARN Acts: California, New Jersey, New York, and Massachusetts have stricter state-level laws.
- Union agreements: If you are covered by a collective bargaining agreement, your severance rights are defined there.
Bottom line: Even without a legal obligation, employers routinely offer severance in exchange for signing a release of claims. That release is leverage — use it.
How Is Severance Pay Calculated? The Standard Formulas
There is no national formula. These are the structures most U.S. employers use:
| Formula | Who uses it | Example: 5 yrs, $60K salary |
|---|---|---|
| 1 week per year | Small-to-mid companies, entry-level / mid-level roles | 5 wks × $1,154 = $5,769 |
| 2 weeks per year | Large corporations, mid-level employees | 10 wks × $1,154 = $11,538 |
| 1 month per year | Executives, VPs, C-suite | 5 mo. × $5,000 = $25,000 |
| Flat 2–4 weeks | Retail, hourly, short-tenure workers | $2,308–$4,615 regardless of tenure |
| Floor + sliding scale | Mid-to-large employers | Min. 4 weeks + 1 wk/yr after year 4 |
What counts as “pay” in the formula?
Almost always, the formula applies to your base salary only — not bonuses, commissions, or overtime. If your compensation is heavily commission-based, this is worth pushing back on. Some employers in sales-driven industries will include a commission average if you make the ask.
Can You Negotiate Your Severance Package?
Yes — and you should. Severance is almost always negotiable. The employer needs your signature on that release. That is your leverage — before you use it.
What to negotiate beyond base pay
- More weeks of base pay — even one or two additional weeks is worth requesting.
- COBRA continuation — ask for 3–6 months of employer-paid premiums ($700–$2,000/month for families).
- Accelerated stock vesting — if you have unvested RSUs or options near a cliff, ask for acceleration.
- A neutral reference letter — critical if your termination was disputed.
- Non-compete narrowing or removal — a broad clause can seriously limit your next job search.
- Outplacement services — employer-paid career coaching and job search support.
Your most important right: You have 21 days
The ADEA gives employees 21 days to review a severance agreement that includes a waiver of age discrimination claims — which most do. Workers over 40 also have 7 days to revoke after signing. [EEOC]
Never let your employer pressure you into signing immediately. That urgency is a tactic, not a legal requirement.