All figures are gross, before taxes and deductions. Severance is taxed as wages, and lump sums are commonly withheld at the federal supplemental rate, so the amount that reaches your account will be meaningfully lower. This calculator does arithmetic on the numbers you enter. It does not judge whether the offer is good.
The calculator tells you what it is worth. It does not tell you if it is fair.
Two people can be offered the same eight weeks and be in completely different positions. The free assessment weighs your tenure, level, performance record, how the job ended, and what the agreement asks you to sign away, then tells you whether the offer looks weak, fair, or strong and explains why.
How to read these numbers
The headline severance figure is the number the employer wants you to focus on. It is usually not the most informative one. Four outputs above matter more.
Weekly pay
Annual base salary divided by 52. This is the unit almost every severance conversation is actually conducted in, and it is the conversion that lets you translate a lump-sum offer into something comparable. If you were offered $18,000 and your weekly pay is $1,827, you were offered a little under ten weeks, whatever the letter says.
Estimated total package
The cash is one component. Employer-paid COBRA, an accrued PTO payout, and a prorated bonus routinely add several thousand dollars, and sometimes more than the severance itself for someone with a large unused vacation balance. Adding them up matters for two reasons: it tells you what you are really being offered, and it shows you where the negotiable room is. Employers who will not move on the cash number will quite often move on three months of COBRA, because it comes out of a different budget and is easier to approve.
Months of pay
The most honest way to think about severance is as runway. Twelve weeks is not really twelve weeks of money; it is roughly two and a half months of not having to accept the first job you are offered. Set that against how long a search in your field and at your level actually takes, and the offer starts to have a meaning that a dollar figure does not convey.
Weeks per year of service
This is the ratio that makes offers comparable. It removes salary and tenure from the comparison and leaves the employer’s actual generosity. When someone online says they got twenty weeks, that number is useless to you until you know they had eighteen years in. One to two weeks per year of service is the most common structure in written employer severance policies. Below one week per year is on the thin side of common practice. Well above two typically reflects a contract, an executive plan, or an employer buying something specific, such as a broad release or a smooth transition.
| Years of service | 8 weeks offered | Weeks per year | How it generally reads |
|---|---|---|---|
| 2 years | $14,615 | 4.0 | Generous relative to tenure |
| 5 years | $14,615 | 1.6 | Within the common range |
| 10 years | $14,615 | 0.8 | Below the common baseline |
| 20 years | $14,615 | 0.4 | Well below the common baseline |
The cash is identical in every row. Whether it is a reasonable offer is not.
What the calculator deliberately leaves out
Some of the most valuable things in a severance package cannot be reduced to a number without inventing precision that does not exist, so this tool does not try.
- Equity. Whether unvested RSUs or options are forfeited, accelerated, or given an extended post-termination exercise window can be worth more than the entire cash component. It depends on your grant agreements and the plan document, not on a formula.
- What you are giving up. A release of claims is consideration flowing the other way. So is a noncompete that limits where you can work next, or a non-disparagement clause with no mutual obligation on the employer.
- Unemployment interaction. How severance affects unemployment benefits varies by state and by how the payment is structured. Salary continuation and a lump sum are not always treated the same way.
- Reference and rehire terms. Hard to price, occasionally decisive for your next role, and among the easier things to get an employer to agree to.
These are exactly the factors the free assessment weighs, because they are the ones a calculator cannot.
Frequently asked questions
How is severance pay calculated?
Most employer formulas start from weekly pay, which is annual base salary divided by 52, then grant a number of weeks based on years of service. One to two weeks per year is the most common structure. Some employers use a flat number of weeks for everyone in a given layoff regardless of tenure, and executive severance is usually set by contract in months of salary rather than weeks per year.
Is my employer required to pay severance?
In most private-sector situations in the United States, no. Federal law does not require severance pay. It becomes an obligation when it is promised in an employment contract, a collective bargaining agreement, or an established written severance plan. Separately, the federal WARN Act can require 60 days of notice or pay in lieu of notice for qualifying mass layoffs and plant closings, and several states have their own, stricter versions. See what severance is and how it works.
How much tax comes out of severance?
Severance is wages. It is subject to federal income tax withholding, Social Security and Medicare, and any state and local income tax that applies. Employers commonly withhold lump-sum severance at the IRS supplemental wage rate of 22 percent for amounts up to $1 million. That is a withholding rate, not your final tax rate, so the difference is settled when you file.
Should I count the COBRA subsidy as real money?
Yes, if you would otherwise have paid for coverage, which most people would. Three months of employer-paid family coverage is commonly worth several thousand dollars, and it is money you do not have to spend during a job search. Treat it as part of the package when comparing offers, and treat it as a serious negotiation item when the employer will not move on cash.
Sources
- U.S. Department of Labor, Wage and Hour Division: severance pay is not required by the Fair Labor Standards Act and is a matter of agreement between employer and employee.
- U.S. Department of Labor: Worker Adjustment and Retraining Notification (WARN) Act notice requirements for qualifying mass layoffs and plant closings.
- Internal Revenue Service, Publication 15 (Circular E): supplemental wage withholding, including the 22 percent flat rate for supplemental wages up to $1 million.
- U.S. Department of Labor: COBRA continuation coverage, including the general 18-month continuation period.