Employment Severance Calculator
Estimates your severance package based on salary, years of service, and termination type. Use it after a layoff or negotiated exit to verify your payout includes base severance, accrued PTO, and any prorated bonus.
About this calculator
Severance pay is typically calculated as a multiple of weekly salary for each year worked, capped at a maximum number of weeks. This calculator uses the formula: Severance = (annualSalary / 52) × min(yearsOfService × 2, 26) × terminationMultiplier. The termination type multiplier adjusts the payout — for example, a layoff may carry a higher multiplier than a voluntary resignation. Accrued PTO is converted to a daily rate: (annualSalary / 260) × accruedPTODays, since a standard work year contains 260 business days. A prorated bonus is then added directly. Together these three components — base severance, PTO payout, and bonus proration — form your total estimated package. Caps on severance weeks (commonly 26) reflect industry-standard practices and many employment agreements.
How to use
Suppose you earn $78,000/year, have 6 years of service, were laid off (multiplier = 1), have 10 accrued PTO days, and a $2,000 prorated bonus. Step 1 — Base severance: ($78,000 / 52) × min(6 × 2, 26) × 1 = $1,500 × 12 = $18,000. Step 2 — PTO payout: ($78,000 / 260) × 10 = $300 × 10 = $3,000. Step 3 — Add bonus: $18,000 + $3,000 + $2,000 = $23,000 total estimated severance.
Frequently asked questions
How is severance pay calculated based on years of service?
The standard method multiplies your weekly salary by a set number of weeks per year worked. This calculator uses two weeks per year of service, capped at 26 weeks total. For example, 8 years of service yields 16 weeks of severance pay. The cap protects employers from unlimited liability while still rewarding long-tenured employees.
What does the termination type multiplier mean in a severance calculation?
The termination type multiplier scales your base severance to reflect the circumstances of your departure. A layoff or without-cause termination typically carries a multiplier of 1.0 or higher, while a resignation may be 0. Some agreements provide enhanced severance for executives or employees terminated during a merger. Always review your employment contract or offer letter for the specific multiplier that applies to your situation.
Is accrued PTO paid out as part of severance?
In many states, accrued PTO is considered earned wages and must be paid upon separation regardless of severance. This calculator converts PTO to a daily rate using annualSalary / 260 working days per year. Ten days of accrued PTO on a $78,000 salary equals $3,000. Whether PTO is legally required to be paid out depends on your state's wage laws and your employer's written policy.