A layoff or resignation rarely arrives on your schedule, and the question everyone asks afterward is the same: how much money am I actually walking away with? This severance calculator turns your weekly pay, your years at the company, and your employer's severance formula into a lump-sum estimate — and then shows you how many months of living expenses that lump sum will cover. Whether you are negotiating a package, planning a job search, or just stress-testing your safety net, the number on this page is the one that matters most.
Adjust the fields and every figure updates instantly. There is no paperwork to file and nothing to install: type in your weekly salary, how long you have worked there, and the weeks-per-year multiplier your company offers, and the result card shows both the estimated severance payment and your monthly runway.
How to Use
- Enter your Weekly Salary — your gross weekly pay before taxes, health premiums, and 401(k) contributions. If you only know your annual pay, divide it by 52; a $104,000 salary is about $2,000 per week.
- Set your Years of Service — the total time you have been employed, rounded to the half-year. Tenure is the single biggest lever in most severance formulas, because packages scale with it.
- Choose your Severance Multiplier — usually expressed as weeks of pay per year of service. Many US employers pay 1 to 2 weeks per year; startups and large corporates vary widely, so check your employee handbook or offer letter.
- Add your Monthly Living Expenses — rent or mortgage, food, utilities, insurance, and any other essential bills. This is optional, but it converts your severance dollar amount into the far more useful question: how long can I go without a paycheck?
The result card first shows your Weeks of Severance (years times the multiplier), then the estimated Severance Pay (weekly salary times those weeks), and finally your Monthly Runway — how many months the severance covers at your current spending level.
How Severance Is Actually Calculated
There is no federal law in the United States requiring employers to offer severance at all — it is a matter of company policy and, in some cases, a union contract. The overwhelming majority of packages, however, follow one simple formula:
Severance Pay = Weekly Salary × (Years of Service × Multiplier)
The multiplier is the number of weeks of pay awarded for each year worked. A company that pays "one week per year" uses a multiplier of 1.0; one that pays "two weeks per year" uses 2.0. White-collar professionals often land between 0.5 and 1.0 weeks per year, while executives and long-tenured staff may negotiate 2 weeks or more.
Worked example: someone earning $2,000 per week who has been at the company for 6 years at a 1.0 multiplier receives 6 weeks of pay — $12,000 before taxes. If their essential monthly spending is $5,000, that $12,000 buys roughly 2.4 months of runway, which is a tight window and a useful signal to start the job search immediately.
Remember that severance is almost always taxable ordinary income, and it is frequently paid out in a lump sum. A few states require employers to offer continued health coverage (COBRA) at your own expense, which is why entering your real monthly expenses — not just rent — matters so much.
Examples
Example 1 — A standard layoff. A mid-career worker earns $2,000 per week ($104,000 per year), has spent 6 years at the firm, and the company pays 1 week per year. The calculator returns 6 weeks of severance, a lump sum of $12,000, and — against $5,000 in monthly bills — about 2.4 months of runway. At that runway, a focused job search should start on day one.
Example 2 — Long tenure, half multiplier. An employee earning $1,500 per week has put in 10 years at a company that awards half a week per year. That is still 5 weeks of pay — $7,500 — which covers roughly 2.5 months at $3,000 of monthly expenses. The lesson: even a modest multiplier becomes meaningful once tenure is long.
Example 3 — A C-suite executive. A senior executive earns $1,000,000 per week in this extreme illustration, with 5 years of tenure and a 1.0 multiplier. The calculator scales cleanly to high magnitudes and returns 5 weeks — $5,000,000 — which against $100,000 of monthly spending buys a 50-month runway. Most readers will never approach these numbers, but the math scales the same way whether the figure is $3,000 or $3,000,000.
FAQ
How is severance pay calculated?
Most packages use a simple formula: weekly salary multiplied by your years of service and by a company-set multiplier of weeks-per-year. For example, $2,000 per week × 6 years × 1.0 weeks-per-year = $12,000. Your exact multiplier is usually written in your employee handbook or severance plan document.
Is severance pay required by law?
In the United States, there is no federal law mandating severance pay. Employers offer it voluntarily, often as part of a written plan tied to a layoff or in exchange for a signed release and non-disparagement agreement. Some states and union contracts impose additional requirements, and larger plant closings trigger WARN Act notice rules — but those are not the same as guaranteed pay.
Do I pay taxes on severance?
Yes. Severance pay is treated as ordinary wage income by the IRS, so federal income tax, Social Security, and Medicare are typically withheld. Because a lump sum can push you into a higher withholding bracket for that pay period, ask payroll whether you can spread payments across two tax years to smooth the tax burden.
How long will my severance last?
Divide your estimated lump sum by your essential monthly expenses. If you receive $12,000 and spend $5,000 per month, you have about 2.4 months of runway. This calculator computes that figure directly in the Monthly Runway line. A general rule of thumb is to aim for at least 3–6 months of expenses; if your runway is shorter, tighten discretionary spending immediately.
Can I negotiate my severance?
Often, yes. Employers frequently open with a package at the low end of their range. You can negotiate more weeks per year, continued health coverage, outplacement services, or a neutral reference. Having a written, calculated figure — including your weekly rate, tenure, and a market multiplier — makes the conversation far more concrete than a vague "I think I deserve more."
Should I take a lump sum or continued salary?
A lump sum gives you cash up front but ends your employment relationship immediately. Continued salary (salary continuation) keeps you on payroll for weeks or months and often preserves benefits longer, but delays the money. A lump sum is usually better if you have a new job lined up; continued pay can be safer if you expect a long search and need health coverage.
Disclaimer
This severance calculator is provided for informational purposes only and does not constitute legal, tax, financial, or HR advice. Estimates are based on the simple formula weekly salary × years of service × multiplier and the inputs you enter; actual severance depends on your employer's written plan, your employment agreement, applicable state law, and any negotiated terms. Tax withholding and benefit continuation are not modeled here. Always confirm your package directly with your employer's HR department, a benefits administrator, or a qualified attorney or tax professional before making decisions.