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Severance Pay Calculator

Estimate severance pay from tenure and salary

How it is calculated

The tool uses a simple tenure formula: weeks of pay = years of service × weeks per year and severance = weeks of pay × weekly salary. You enter years (decimals allowed, for example 6.5), the gross weekly pay and the number of weeks your contract or policy grants for each year. The number of weeks is displayed rounded to a whole number, while the money is computed from the unrounded figure and shown in dollars.

No input may be negative. The weeks-per-year multiplier is not a universal figure: it comes from your contract, company policy or, in some countries, from local law, and the rules and any caps differ by country and over time. The tool does not apply caps, taxes, notice periods or unused leave payouts; it multiplies the numbers you give it.

Worked example

An employee has 6.5 years of service, earns $1,200 a week and the policy grants 2 weeks of pay per year. Weeks of pay: 6.5 × 2 = 13 weeks. Severance: 13 × 1,200 = $15,600.00. Had the policy granted only 1 week per year, the payout would be half of that, $7,800.

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Common mistakes

  • Using monthly or annual pay in the weekly field. Divide annual pay by 52 first.
  • Entering gross pay when the agreement is based on a different definition, such as base salary excluding bonuses.
  • Counting partial years incorrectly: 6 years and 6 months is 6.5, not 6.6.
  • Assuming the weeks-per-year figure is the same everywhere. Check your own contract or applicable local rules.
  • Treating the result as the amount in hand; taxes, caps and other deductions are not applied here.

About this calculator

Severance pay formulas typically scale with tenure: Severance = Years of service × Weekly salary × Weeks granted per year of service, where the "weeks per year" multiplier is set by company policy, employment contract, or in some jurisdictions by statute — commonly ranging from half a week to two or more weeks of pay for every year worked.

HR departments and employment lawyers use this calculation when structuring layoffs and drafting severance agreements, since the weeks-per-year multiplier is exactly the variable that gets negotiated in individual exit packages, executive contracts, or collective bargaining agreements, while the underlying tenure-times-salary structure stays the same.

Employees estimating what a layoff package should include, HR professionals budgeting for workforce reductions, and job seekers comparing severance terms across offers all use this formula to turn years of service and salary into a concrete expected payout before signing anything.

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