How the Severance Pay Calculator Works

The Severance Formula

Total Severance = (Annual Salary / 52) x (Years of Service x Weeks Per Year). The most common formula is 1 week per year of service. We offer 1, 2, and 3 weeks per year to reflect different employer policies.

Years of Service

Count from your hire date to your termination date. Partial years are often counted — for example, 7 years and 6 months might round to 7.5 years depending on employer policy.

Weekly Salary Calculation

We divide your annual salary by 52 weeks. For hourly employees, multiply your hourly rate by your average weekly hours to find your weekly equivalent.

WARN Act

The federal WARN Act requires employers with 100+ employees to provide 60 days written notice before mass layoffs or plant closings. Failure to give notice triggers 60 days of pay and benefits — separate from negotiated severance.

State-Specific Rules

Most states have no mandatory severance law. New Jersey (2023 amendment) and Maine are exceptions. We display state-specific WARN Act and severance rules when you select your state.

Tax Considerations

Severance is taxed as ordinary income. Federal withholding is typically at the 22% supplemental rate. States with income tax also withhold. Budget for an effective tax rate of 25-35% on your severance depending on your income level.