Step-by-step walkthrough

Severance Pay Calculator Guide

Use this companion guide beside the interactive calculator to make sure you understand the “why” behind every click. Each section includes the classroom explanation, student-friendly language, and quick practice prompts.

Before you start

Collect the data points listed below and double-check their units. Keeping an organized “givens” list is one of the fastest ways to reduce math errors and impress exam graders.

  • severance pay calculator
  • severance calculator
  • layoff pay calculator

Detailed procedure

  1. Step 1

    Enter annual salary and total years of service (partial years, like 4.5, are fine).

  2. Step 2

    Enter the weeks-of-pay-per-year rate from your company's severance policy or employment contract — 1-2 weeks per year is common.

  3. Step 3

    Enter any plan minimum (a guaranteed floor regardless of tenure) if your policy has one.

Teaching & troubleshooting tips

Is severance pay legally required?

In most of the US, no — severance is typically discretionary unless promised in a contract, employee handbook, or required by a mass-layoff law like the WARN Act. Requirements vary significantly outside the US, so check local labor law.

Does this account for unused PTO or bonuses?

No — this calculates base severance only from salary and tenure. Unused vacation payout, pro-rated bonuses, and continued benefits are usually calculated separately and vary by company policy.

Next steps