How the severance pay calculator works
Severance packages can be expressed as a number of weeks for each recognized year of service or as a fixed number of weeks in a written offer. This calculator supports both approaches. It converts annual salary or hourly pay into weekly base pay, applies the terms you enter, then adds any separate cash amount.
The calculator deliberately does not choose a formula for you. Severance may be voluntary, contractual, collectively bargained or governed by rules that vary by employer and jurisdiction. Use the written policy, agreement or offer as the source for every input.
Severance pay formulas
Weekly pay from salary: annual base salary ÷ 52.
Weekly pay from hourly work: hourly base pay × regular hours per week.
Policy weeks: recognized years × weeks per year, then apply the entered minimum and optional maximum.
Base severance: weekly base pay × severance weeks.
Gross package: base severance + additional cash pay.
Estimated net: gross package × (1 − entered withholding rate).
Expense runway: estimated net ÷ monthly essential expenses.
Checked salary example
An annual salary of US$78,000 equals US$1,500 per week. With six recognized years and two weeks per year, the service formula produces 12 weeks. A four-week minimum and 26-week maximum do not change that result.
Base severance is 12 × US$1,500 = US$18,000. Adding US$3,000 produces a gross package of US$21,000. At an assumed 25% withholding rate, the estimated amount withheld is US$5,250 and estimated net pay is US$15,750. If essential expenses are US$4,000 per month, the simple runway is 3.94 months.
Checked hourly example
At US$30 per hour and 40 regular hours per week, weekly base pay is US$1,200. A fixed offer of 10 weeks produces US$12,000 of base severance. With US$1,500 of additional cash pay and 20% assumed withholding, gross pay is US$13,500 and the estimated net is US$10,800.
What to include as additional cash pay
The additional field can represent cash items that are outside the weeks-based formula, such as paid notice, an agreed bonus or paid accrued leave. Include an item only if it is not already part of salary or the severance weeks. Benefits continuation, insurance, equity, retirement contributions, outplacement services and noncash terms need separate review because this calculator does not assign them a value.
Withholding, taxes and legal limits
- The withholding percentage is supplied by the user. The calculator does not determine federal, state, provincial, local or payroll taxes.
- Withholding is not necessarily the final tax liability. Timing, payment method, other income, deductions and local rules may change the result.
- The tool does not decide whether severance is required, whether a release is valid, or whether notice, benefits, commissions, bonuses or accrued leave are owed.
- Years of service may be rounded, prorated or limited by a policy. Enter the recognized value rather than assuming partial years count.
- Expense runway is a simple division and does not model later income, unemployment benefits, investment returns, inflation or changing expenses.
Frequently asked questions
How many weeks of severance should I enter?
Use the exact number stated in the written offer. If the policy says a number of weeks for each service year, use the policy method and enter any minimum or maximum separately.
Does annual salary include a bonus?
Use the pay base defined by the policy or offer. If a bonus is paid separately and is not already included in the formula, it can be entered as additional cash pay.
Why is the gross package equivalent to more weeks than the severance weeks?
The equivalent-week figure divides the entire gross package by weekly base pay. A separate cash amount therefore increases the equivalent beyond the weeks used to calculate base severance.
Can I use this result to check a legal entitlement?
No. The result only applies arithmetic to terms you provide. Employment law, contracts, collective agreements and company policies can produce different obligations.
Related calculators
Convert hourly and annual pay with the Salary Calculator. Estimate regular paycheck withholding with the Paycheck Calculator. Plan essential expenses with the Emergency Fund Calculator, or estimate paid leave under an employer policy with the PTO Accrual Calculator.