# How much severance pay will I get?

Estimates severance pay from your pay and years of service under a weeks-per-year company policy, or under the federal employee severance pay formula.

- Page: https://www.acalculator.org/finance/severance-pay-calculator
- JSON spec: https://www.acalculator.org/finance/severance-pay-calculator.json
- Version: aa5dc660de92

## Default answer

Example with the default inputs (Formula Company policy, Pay $60,000.00, Pay is per Year, Years of service 5, Weeks of pay per year of service 2): Severance pay: $11,538.46 (10 weeks of pay at $1,153.85 a week).

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| method | Formula | A company policy of so many weeks of pay per year of service, or the federal employee formula. |
| pay | Pay | Your regular pay (basic pay for a federal employee), per week or per year. |
| per | Pay is per | Whether the pay you typed is per week or per year (a year is 52 weeks). |
| yrs | Years of service | How long you have worked for the employer, in years (6 months is 0.5). |
| wpy | Weeks of pay per year of service | The weeks of pay the policy gives for each year of service, often 1 or 2. |
| minw | Minimum weeks | The fewest weeks of pay the policy gives, if it sets a floor. |
| maxw | Maximum weeks | The most weeks of pay the policy gives, if it sets a cap. |
| sy | Full years of creditable service | Your full years of creditable federal service. |
| sm | Extra months of service | Months of service beyond the full years, 0 to 11. |
| ay | Age in years | Your age in full years on the day you separate. |
| am | Extra months of age | Months of age beyond the full years, 0 to 11. |
| prior | Severance weeks received before | Weeks of federal severance pay you received in the past; the lifetime limit is 52 weeks. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| severance | Severance pay | Weeks of severance × weekly pay. |
| weeks | Weeks of pay | The weeks of pay the formula gives, after any floor, cap or lifetime limit. |
| weekly | Weekly pay | The pay for one week (annual pay ÷ 52). |
| basic | Basic allowance | Federal: the allowance for years of service, before the age adjustment and the 52-week limit. |
| ageAdjustment | Age adjustment | Federal: 2.5% of the basic allowance for each full 3 months of age over 40, before the 52-week limit. |

## Method

Company policy: weeks = years × weeks per year, raised to the floor and cut to the cap. Federal: basic weeks = 1 per full year up to 10 + 2 per full year beyond 10 + 25% of the next year’s weeks per full 3 months; weeks = basic × (1 + 2.5% × full quarters of age over 40), at most 52 less weeks received before. Severance = weeks × weekly pay.

## Assumptions

- No U.S. federal law requires private employers to pay severance; a company policy or agreement sets it.
- Weekly pay is annual pay ÷ 52 when you type pay per year.
- Federal: you have at least 12 months of continuous service and meet OPM’s other conditions (involuntary separation, not eligible for an immediate annuity).
- Taxes are left out; severance pay is taxable wages.

## Worked examples

1. method = federal, pay = $1,500.00, per = week, sy = 20, sm = 4, ay = 45, am = 8 gives basic = $45,750.00, ageAdjustment = $25,162.50, severance = $70,912.50, weeks = 47.275. Source: OPM, Fact Sheet: Severance Pay (basic allowance, age adjustment and the 52-week lifetime limit; worked example). https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/severance-pay/ (20 years 4 months of service, $1,500 a week, age 45 years 8 months: $45,750 + $25,162.50 = $70,912.50).
2. method = federal, pay = $1,000.00, per = week, sy = 30, ay = 60 gives weeks = 52, severance = $52,000.00, basic = $50,000.00. Source: OPM, Fact Sheet: Severance Pay (basic allowance, age adjustment and the 52-week lifetime limit; worked example). https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/severance-pay/ (52-week lifetime limit).
3. method = policy, pay = $60,000.00, per = year, yrs = 5, wpy = 2 gives weeks = 10, weekly = $1,153.85, severance = $11,538.46.
4. method = policy, pay = $1,200.00, per = week, yrs = 1.5, wpy = 1, minw = 4, maxw = 26 gives weeks = 4, severance = $4,800.00.

## FAQ

### How is severance pay calculated?

Most company policies give a number of weeks of pay for each year of service. At 2 weeks per year, 5 years of service give 10 weeks. On a $60,000 salary a week of pay is 60,000 ÷ 52 = $1,153.85, so severance is about $11,538.46.

### Is my employer required to pay severance?

Not under U.S. federal law. The Department of Labor says the Fair Labor Standards Act has no severance pay requirement; severance is a matter of agreement between an employer and an employee. Your contract, a company policy or a union agreement may promise it.

### How is federal employee severance pay calculated?

OPM gives 1 week of basic pay for each full year of service up to 10 years and 2 weeks for each full year after 10, plus 25% of a year’s amount for each full 3 months beyond the last full year. An age adjustment adds 2.5% for each full 3 months of age over 40. OPM’s example of 20 years 4 months of service at $1,500 a week, age 45 years 8 months, gives $45,750 + $25,162.50 = $70,912.50.

### Is there a limit on federal severance pay?

Yes. A federal employee may receive no more than 52 weeks of severance pay in a lifetime. Type the weeks you received in the past, and the page cuts the total to what is left.

### Does a partial year count?

Under a company policy it depends on the wording; this page prorates, so 1.5 years at 2 weeks gives 3 weeks. Under the federal rule, each full 3 months beyond the last full year adds 25% of a year’s weeks, and leftover days do not count.

### Is severance pay taxed?

Yes. Severance pay is wages, so income tax, Social Security and Medicare are withheld from it. This page shows the amount before tax.

## Sources

- U.S. Department of Labor, Severance Pay (there is no requirement in the FLSA for severance pay; it is a matter of agreement). https://www.dol.gov/general/topic/wages/severancepay (retrieved 2026-10-05)
- U.S. Office of Personnel Management, Fact Sheet: Severance Pay (eligibility, basic severance allowance, age adjustment allowance, 52-week lifetime limit, and the 20 years 4 months worked example; 5 U.S.C. 5595 and 5 CFR part 550, subpart G). https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/severance-pay/ (retrieved 2026-10-05)