Severance Calculator: Weeks of Pay by Years of Service

How the formula works

US federal law does not require severance pay. The U.S. Department of Labor says severance "is a matter of agreement between an employer and an employee (or the employee's representative)". The formula here is a way plans and offers are often written, not a legal entitlement.

Years counted = months of service ÷ 12 (or whole years, or rounded up)
Weeks of pay = years counted × weeks per year (then the minimum and maximum)
Severance = weeks of pay × weekly pay + any fixed amount

If your employer has a written severance plan, the plan's terms set the amount. The Department of Labor's Employee Benefits Security Administration may be able to help if plan benefits were not paid.

Enter the weeks per year from your plan or offer. The example uses 2 weeks only as an example; no source measures a standard figure, so replace it with the figure in your plan or offer. Unused PTO is a separate line and is never added into the severance figure. All amounts are gross, before tax. Taxes are not shown.

Worked example: a part year counted three ways

An example offer pays 2 weeks of pay for each year of service. The person worked 7 years and 6 months and earns $1,200 a week.

7 years 6 months, 2 weeks a year, $1,200 a week
A part year counts as	Working	Severance
Whole years only	7 × 2 = 14 weeks × $1,200	$16,800.00
By the month	90 ÷ 12 = 7.5 years × 2 = 15 weeks × $1,200	$18,000.00
Rounded up	8 × 2 = 16 weeks × $1,200	$19,200.00

With a 12-week maximum, the by-the-month figure becomes 12 × $1,200 = $14,400.00. Add 40 hours of unused PTO at $30.00 an hour and the PTO line is $1,200.00, shown apart from the severance.

How service is counted from dates

The calculator counts full calendar months from the start date. A month counts only when the end day of the month is on or after the start day. From March 15, 2019 to September 14, 2026 that is 89 months; to September 15, 2026 it is 90. A start on the last days of a longer month clamps to the last day of a shorter end month, so January 31, 2024 to February 29, 2024 counts as 1 month. Plans may count service differently, so check the plan's wording.

What federal and state law say

The federal WARN Act is a notice law, not a severance law. Employers with 100 or more full-time employees must generally give 60 days' written notice before a plant closing or mass layoff, with some exceptions (29 U.S.C. 2101, 2102). An employer that does not may be liable for back pay and benefits for up to 60 days (29 U.S.C. 2104). This calculator does not compute WARN amounts.

A few states require severance in some closings or layoffs. New Jersey requires one week of pay for each full year of employment when a mass layoff, closing or transfer ends 50 or more jobs at or reporting to a New Jersey site within 30 days, plus 4 more weeks of pay if the employer gave less notice than the law requires (N.J.S.A. 34:21-1, 34:21-2). The weekly rate is the higher of the employee's average regular rate over the last 3 years and the final regular rate. If a plan or union contract pays more, the employee gets the larger amount, not both. Some exceptions apply. Maine requires one week's pay for each year of service, and partial pay for a partial year, for eligible employees with at least 3 years at an establishment with 100 or more employees that closes, relocates or has a mass layoff (26 M.R.S. 625-B). Check your state's labor department.

To estimate the New Jersey amount here, set weeks per year to 1, choose Whole years, enter the higher of the two weekly rates as weekly pay, and if notice was short, enter 4 weeks of pay as the fixed amount.

Federal law does not require payment for unused vacation. Some states do: California requires vested vacation to be paid at the final rate when an employee is terminated (Labor Code 227.3), and Illinois requires earned vacation to be paid at the final rate when an employee resigns or is terminated (820 ILCS 115/5), unless a union contract says otherwise. Other states leave it to the employer's policy.

Agreements that ask for a release

If you are 40 or older and asked to waive age-discrimination claims, federal law requires at least 21 days to consider the agreement (45 days in a group program) and 7 days to revoke it after signing (29 U.S.C. 626(f)).

Questions

How is severance pay calculated?

There is no federal formula. Plans and offers often pay a set number of weeks of pay for each year of service. Multiply the years counted by the weeks per year, then by weekly pay. A plan or offer may also add a minimum, a maximum or a fixed amount.

Does federal law require severance pay?

No. The U.S. Department of Labor says severance “is a matter of agreement between an employer and an employee (or the employee's representative)”.

Is the WARN Act the same as severance pay?

No. The federal WARN Act is a notice law, not a severance law. Employers with 100 or more full-time employees must generally give 60 days' written notice before a plant closing or mass layoff, with some exceptions. New Jersey's own layoff law does require severance in covered layoffs.

Is unused vacation paid out at separation?

US federal law does not require it. Some states do, such as California and Illinois. Other states leave it to the employer's policy. This calculator shows unused PTO on its own line.

Can severance terms be discussed with an employer?

Severance is set by agreement, so terms can be discussed with your employer. If you have a written severance plan, the plan's terms set the amount.

Sources

Rules checked: October 31, 2026
Written by: SumTrue
Tested against: Published test cases
Limits: Not legal, tax or payroll advice. An estimate from the figures you enter. See the Disclaimer.

Severance calculator

Severance estimate