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Severance Pay Calculator

The Severance Pay Calculator estimates a gross severance amount from regular pay, the severance weeks granted per year of service, completed service time, and any additional payment. It is structured around user-entered policy or agreement terms rather than assuming a statutory entitlement.

Severance rules can vary by country, state, contract, union agreement, employer policy, and termination circumstances. Use the result as an arithmetic estimate and verify eligibility, tax treatment, benefit continuation, notice pay, caps, and required deductions separately.

Severance assumptions

USD
years
weeks
USD
%
Result
—
before the entered withholding estimate
Service-based amount—
Estimated withholding—
Estimated amount after withholding—

1. Confirm the weekly pay basis
Use the regular weekly amount defined by the applicable policy, agreement, or law.

2. Enter recognized service
Use the years of service that qualify under the severance terms, including partial years only when allowed.

3. Enter weeks per year
Copy the severance formula from the employer policy, offer, contract, or governing rule.

4. Add separate payments
Include only lump sums that are part of the severance package and not already reflected in weekly pay.

5. Estimate withholding
Enter a planning percentage if you want an after-withholding illustration.

6. Verify the package
Check notice pay, accrued leave, benefits, releases, caps, and local requirements separately.

Service-based severance = Weekly pay × Years of service × Weeks per year
Gross severance = Service-based severance + Additional pay
Estimated net = Gross severance × (1 − Withholding rate)

The calculation applies only the terms entered. It does not determine legal eligibility or the correct tax rate.

What the result means

The main result is the gross severance amount produced by the user-entered pay and service formula.

Actual payments may differ because of statutory caps, partial-year rules, payroll definitions, deductions, benefit offsets, or negotiated terms.

Given: Weekly pay is $1,400, recognized service is 6 years, severance is 2 weeks per year, additional pay is $2,500, and estimated withholding is 22%.

Calculation: Service severance = $1,400 × 6 × 2 = $16,800. Gross severance = $16,800 + $2,500 = $19,300. Estimated withholding = $4,246.

Result: Estimated gross severance is $19,300 and the after-withholding illustration is $15,054.

Does this calculator determine whether severance is legally required?

No. Eligibility and minimum amounts depend on the applicable law, contract, policy, collective agreement, and termination facts.

Should bonuses be included in weekly pay?

Only when the governing definition of regular pay includes them. Some arrangements use base salary alone, while others include specific recurring compensation.

How are partial years of service handled?

Enter a decimal only if the applicable rule prorates partial years. Some policies count completed years only or apply separate rounding rules.

Is the withholding estimate the final tax owed?

No. Payroll withholding and final tax liability are not necessarily the same, and severance may receive different treatment across jurisdictions.

What other payments might be separate from severance?

Accrued wages, unused leave, notice pay, bonuses, commissions, expense reimbursements, and benefit continuation may be calculated separately depending on the arrangement.