What is Severance Pay Estimator: Calculate Separation Benefits?
How it Works
Step-by-Step Guide
1. Tenure
Enter total full years worked.
2. Weekly Rate
Your gross weekly income.
3. Policy Factor
Weeks per year (standard is 1-2).
4. Total
Estimated gross payout.
Example
Input: 5 Years, $1,500/wk, 2 wks/yr policy
Result: $15,000 Severance
FAQ
Is severance mandatory?
In the US, generally no, unless specified in a contract or union agreement. In many other countries (UK, Canada, EU), statutory redundancy pay is mandatory.
How is severance taxed?
It is taxed as supplemental income. Employers usually withhold flat rates (e.g., 22% federal in US) plus FICA.
Does severance affect unemployment?
In many states, receiving severance can delay the start of unemployment benefits. Check local laws.
Can I negotiate severance?
Yes. You can often negotiate for more weeks, extended health coverage (COBRA), or accelerated stock vesting.
What about unused PTO?
Many states require employers to pay out accrued vacation time separately from severance.
Conclusion
Severance is often negotiable, especially for senior roles. Use this estimate as a baseline. Remember that severance payments are taxable as supplemental income and may affect your eligibility for unemployment benefits. Always review your specific employment contract or company handbook.