Severance Pay Calculator: Estimate Your Layoff Payout

What the severance pay calculator does.

A severance pay calculator turns your salary, tenure, and employer's severance formula into a dollar estimate. The most common formula is weekly pay multiplied by years of service multiplied by a weeks-per-year rate set by the employer. For example, a $75,000 salary with three years of service and a two-weeks-per-year policy works out to six weeks of pay, or about $8,654. Add ten days of unused PTO and the estimated total payout rises to about $11,538 — roughly eight weeks of pay in total.

Severance is not required by federal law in most cases, so terms vary by employer, role, and sometimes by how the layoff was handled. This calculator gives you a starting estimate so you can sanity-check an offer, plan your job search runway, or negotiate from an informed position.

How to use the calculator.

Enter your salary, years of service, and your employer's weeks-per-year rate, then add any unused PTO days. The calculator updates your estimated payout and runway in weeks as soon as anything changes.

The severance formula, explained.

The standard formula is: weekly pay × years of service × weeks-per-year rate = severance pay. Weekly pay is your annual salary divided by 52. The weeks-per-year rate is set entirely by your employer's policy — there is no single national standard.

Many policies also include a minimum floor, such as two or four weeks of pay, even for employees with less than a year of tenure. Some employers round years of service up to the next whole year, which this calculator supports as an option.

Unused PTO and taxes on severance.

Many states require employers to pay out unused, accrued vacation or PTO at termination, separate from any severance package. Check your state's law and your final pay stub — this calculator lets you add PTO days so you see the combined estimated total.

Severance pay is generally treated as taxable wages. It is typically subject to federal income tax, Social Security, and Medicare, the same categories that come out of a regular paycheck. Some employers pay severance as a lump sum, while others spread it across your normal pay schedule — the tax withholding method can differ between the two, though the total tax owed is generally similar either way.

The runway estimate above is based on gross weekly pay, not what actually lands in your bank account. Since withholding reduces every severance dollar the same way it reduces a regular paycheck, your real after-tax runway is shorter than the weeks-of-pay figure shown — use the paycheck calculator on your severance amount for a closer take-home estimate.

Severance can also affect unemployment benefits, depending on your state. Some states delay or reduce benefits while severance is being paid out, so check your state unemployment office before assuming both will stack fully.

Negotiating a severance package.

A severance offer is often a starting point, not a final number, especially in larger layoffs. Before signing anything, read the full agreement, check what you are being asked to release (such as legal claims), and confirm the payout math against your own calculation.

Common items to ask about beyond the base severance weeks: unused PTO payout, health insurance continuation (COBRA subsidy or premium coverage), the timing of the final payment, and whether outplacement support or a reference is included. If a company-wide layoff is unusually large or high-profile, package terms sometimes improve with additional negotiation or through pooled employee bargaining.

Severance calculator — FAQ.

More free Standout tools and reading.

If you're facing a layoff, these tools and articles cover the numbers and the next steps.