What is the most common severance formula?

The most widely used formula in the US is one week of base pay per year of service, often capped at 26 weeks. Some companies offer two weeks per year, particularly for senior or long-tenure employees.

Is severance pay legally required in the US?

Federal law does not require severance pay. It is typically offered as a contractual obligation, per company policy, or as part of a separation agreement. Some states have additional rules, so check your local laws.

Does severance include bonuses or commission?

Most severance formulas use base salary only. Bonuses, commissions, and overtime are typically excluded unless your employment contract specifies otherwise.

What is a weeks cap and should I apply one?

Many policies cap severance at a maximum number of weeks (e.g., 26 weeks) regardless of tenure. Enter your company's cap in the optional field to see its effect on the payout.

How is weekly salary calculated from annual salary?

Weekly salary is annual salary divided by 52. For example, $78,000 per year equals $1,500 per week.

Are partial years of service counted?

Policies vary. Some round down to full years; others count partial years proportionally. This calculator uses the number you enter, so you can try both 4 and 4.5 years to compare scenarios.

Severance Pay Calculator

Name: Severance Pay Calculator
Availability: InStock
Author: Nham Vu

Enter your salary, years of service, and severance formula to instantly estimate your total severance package.

Your Details

Salary Input

Annual Base Salary ($)

Years of Service

Decimals accepted (e.g. 4.5 for four and a half years)

Severance Formula

Maximum Weeks Cap (optional)

Fill in your details and click Calculate to see your estimated severance package.

Summary

Enter your salary, years of service, and severance formula to instantly estimate your total severance package.

How it works

Enter your annual salary or weekly pay rate.
Enter your total years of service (decimals accepted for partial years).
Choose the severance formula your company uses: 1 week or 2 weeks per year of service.
Optionally set a minimum or maximum weeks cap if your policy has one.
The calculator multiplies weeks earned by your weekly salary to produce the gross severance total.
Review the full breakdown including weeks earned, weekly rate, and total payout.

Use cases

Estimate your severance package before negotiating a layoff agreement.
Compare offers that use different per-year multipliers.
Verify that a severance letter matches your expected entitlement.
Model how an additional year of tenure would change the payout.
HR teams drafting severance policy documentation.
Employment attorneys doing a quick sanity-check on a client's package.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu