Monthly Severance Calculator

1. Enter monthly base pay
Use the compensation definition specified by the applicable policy, such as base salary only or eligible regular earnings.

2. Enter completed service
Provide years and any additional months of recognized service.

3. Set the severance factor
Enter the number of salary months awarded for each year of service.

4. Apply any minimum or maximum
If a policy includes a floor or cap, compare the formula result with those limits.

5. Review the gross estimate
The displayed figure is before taxes, benefit offsets, or other deductions.

Formula

Service years = Completed years + (Additional months / 12)Base severance = Monthly eligible pay × Service years × Severance months per yearFinal severance = Base severance adjusted for any stated minimum or maximum

Where

• Monthly eligible pay = pay amount recognized by the policy
• Service years = credited service expressed in years
• Severance months per year = policy multiplier

Assumptions

The formula assumes proportional credit for partial years. Some policies count only completed years, round service, include bonuses, or apply statutory formulas instead. Use the governing terms for the actual calculation.

What the result means

Estimated severance pay based on the values entered.

Results are estimates and may differ from payroll, tax, legal, investment, or accounting systems.

Given

• Monthly eligible pay: $4,800

• Completed service: 6 years 6 months

• Severance factor: 0.5 month per service year

• No minimum or cap

Calculation

Service years = 6 + (6 / 12) = 6.5 years

Base severance = $4,800 × 6.5 × 0.5 = $15,600

Result

Estimated gross severance: $15,600

Interpretation

Under a policy granting half a month of eligible pay for each credited year, 6.5 years of service produces an estimated severance of $15,600.