Severance Pay Calculator
Calculate your severance pay based on years of service, annual salary, and your company's severance policy
Choose an industry to auto-fill typical severance policy values. You can modify any values afterward.
Common values: 1-2 weeks per year of service
Advanced Features
Select your state to see relevant labor rules and requirements
Additional Components
Add unused vacation/PTO days to severance
Add earned but unpaid bonus/commission
Estimate COBRA health insurance costs
Estimate federal and state tax withholding
Understanding what constitutes "fair" severance pay can help you navigate negotiations and make informed decisions. While there's no federal requirement for severance pay in the US, industry standards and best practices can guide expectations.
Industry Standards
Tech Industry
Typically 2-4 weeks per year of service, often with extended health insurance coverage. Senior roles may receive 6+ months.
Finance/Banking
Generally 1-2 weeks per year, sometimes with bonus continuation. Senior executives may receive 1-2 years' salary.
Healthcare
Typically 2 weeks per year of service, with continued benefits coverage. Varies significantly by role and facility type.
Manufacturing
Usually 1-2 weeks per year, often tied to union contracts or company policy. May include extended benefits.
Key Factors Affecting Severance
- Years of Service: Longer tenure typically means more generous severance
- Role & Level: Executive and senior roles often receive 3-12 months or more
- Company Size: Larger companies tend to have more standardized, generous policies
- Industry: High-margin industries (tech, finance) often offer better severance
- Reason for Termination: Layoffs usually include severance; performance terminations may not
- Employment Contract: Contractual obligations may specify minimum severance amounts
What's Considered Fair?
Minimum Standard: 1 week per year of service is considered the baseline for most industries.
Good Standard: 2 weeks per year of service is common for mid-to-large companies.
Excellent Standard: 3-4+ weeks per year, especially for senior roles or in competitive industries.
Additional Considerations: Fair severance often includes continued health insurance (COBRA assistance), outplacement services, and sometimes bonus/commission payouts.
State Requirements
Most states don't require severance pay unless specified in an employment contract or company policy. However, some states have specific requirements for mass layoffs (WARN Act). Always check your employment contract and state labor laws.
Severance pay is compensation provided to employees who are laid off or terminated through no fault of their own. The amount and terms of severance pay vary by company policy, employment contract, and location.
Common Severance Pay Policies:
- Weeks per Year: 1-2 weeks of pay per year of service (most common)
- Fixed Payout: A predetermined amount regardless of years of service
- Custom Formula: Company-specific calculations based on various factors