How to use this severance pay calculator
Enter your annual base salary and total length of service (years plus any additional months). Choose a calculation method: weeks per year of service (most common in the US), months per year (common for executive packages), a fixed number of weeks, or a custom dollar amount if you already know the base figure. Optionally include a prorated annual bonus and unused PTO days for a complete package estimate.
The calculator shows your total severance as a dollar amount and converts it to equivalent weeks and months of pay. This helps you evaluate whether an offer is competitive and understand how long the package will sustain you during a job search.
Severance pay standards by country
United States: No federal law requires severance pay for most employees. Companies typically offer 1–2 weeks per year of service as a goodwill gesture or as part of a separation agreement. The WARN Act requires 60 days' notice (or pay) for mass layoffs at companies with 100+ employees. Executive packages may include 6–24 months of base salary plus accelerated equity vesting.
Canada: Provincial employment standards set minimums. In Ontario, employees receive 1 week per year of service (up to 8 weeks) plus additional "severance pay" of 1 week per year for those with 5+ years at companies with $2.5M+ payroll. Federal employees follow the Canada Labour Code.
United Kingdom: Statutory redundancy pay is 0.5–1.5 weeks per year of service (based on age), capped at £643/week (2024–25). Many employers offer enhanced packages above statutory minimums, especially for senior roles.
Australia: The National Employment Standards provide redundancy pay of 4–16 weeks based on years of service. Small businesses (fewer than 15 employees) are exempt from statutory redundancy but may still offer it.
What to negotiate beyond base severance
Health insurance continuation: Ask for employer-paid COBRA premiums for the duration of your severance period. COBRA can cost $600–$2,000+/month for family coverage. Some companies offer continued benefits at employee rates instead.
Equity and stock options: If you have unvested RSUs or stock options, negotiate for accelerated vesting or an extended exercise window. This can be worth more than the cash severance for employees at pre-IPO or high-growth companies.
Non-compete modifications: If signing a non-compete, negotiate a shorter duration, narrower geographic scope, or additional compensation for the restricted period. Some states (California, Oklahoma, North Dakota) don't enforce non-competes at all.
Outplacement services: Career coaching, resume review, and job placement assistance. This costs the company $2,000–$10,000 but is highly valuable during a transition. Always ask — it's a low-cost add for employers.
Frequently Asked Questions
How is severance pay typically calculated?
The most common formula is 1–2 weeks of pay per year of service. Some employers offer 1 month per year, especially for senior roles. Others use a fixed number of weeks regardless of tenure. There is no universal legal requirement in the US — severance is usually at the employer's discretion unless required by contract, company policy, or collective bargaining agreement. In Canada and many European countries, statutory minimums exist.
Is severance pay taxable?
In most countries, yes. In the US, severance is treated as supplemental wages and subject to federal income tax, Social Security, and Medicare. Your employer may withhold at a flat 22% federal rate or use the aggregate method. State taxes also apply. Some countries have partial exemptions — check your local tax authority for specifics.
Should I negotiate my severance package?
Almost always. Initial severance offers are often negotiable, especially for mid-to-senior roles. You can negotiate the dollar amount, continuation of health insurance (COBRA subsidies), outplacement services, non-compete clause modifications, equity vesting acceleration, and the timing of payments (lump sum vs installments). Consulting an employment attorney before signing is recommended for packages over a few thousand dollars.
What is the difference between severance and redundancy pay?
In the US, 'severance' is a general term for any employer-paid separation benefit. In the UK and Australia, 'redundancy pay' is a statutory entitlement when a role is eliminated. UK statutory redundancy is based on age, weekly pay (capped), and years of service. Australian redundancy pay is defined by the National Employment Standards. This calculator handles both scenarios — use the method that matches your situation.
Does unused PTO get paid out?
It depends on your jurisdiction and employer policy. In the US, some states (California, Illinois, Montana, etc.) require PTO payout at termination. Other states leave it to employer policy. In many other countries, accrued leave must be paid out by law. Check your employment contract and local labor laws. This calculator lets you add PTO payout as a separate line item.
Privacy and methodology
This calculator runs entirely in your browser — no salary or employment data is sent to any server. Severance is calculated using the formula you select (weeks per year, months per year, fixed weeks, or custom). PTO payout uses daily salary (annual ÷ 260 working days). Results are estimates for planning purposes only. Actual severance depends on your employer's policies, employment contract, and applicable laws. This tool does not constitute legal or financial advice. Consult an employment attorney for significant severance negotiations.