Severance Pay Calculator

How Severance Pay Works

Severance pay is compensation provided to employees upon termination of employment. While not legally required in most situations, it is commonly offered as part of a separation agreement. The typical formula is one to two weeks of pay per year of service, though this varies significantly by industry, seniority, and company policy. Severance agreements often include a release of legal claims against the employer.

Negotiating Your Severance

Most employees accept the first severance offer without negotiating. However, employers often have flexibility. Consider asking for additional weeks of pay (especially if you have 10+ years of service), extended health benefits, accelerated vesting of unvested equity, outplacement services, and a favorable non-disparagement agreement. Having an employment attorney review your agreement before signing can be well worth the cost.

Frequently Asked Questions