Severance Pay Calculator

The unit is a week of pay, and nobody asks for the hourly rate

Severance is quoted in weeks, not dollars, and the dollar figure is that many weeks of pay. The whole answer therefore rests on one number — what a week of your pay is — and that is where all seven HTML pages in the eight results for this phrase start from the same place: an annual salary, or a basic pay figure, divided by 52. None of the seven takes an hourly rate as an input. On a 40-hour schedule the two routes agree. On any other schedule they do not.

Four hourly rates, on a 40-hour week and on a 32-hour week, over 12 weeks

The middle two columns are the same person on two schedules. At $22.50 an hour, 32 hours a week is $720.00 a week, and 12 weeks of that is $8,640.00 — $2,160.00 below the 40-hour answer. An annual figure divided by 52 cannot show that, because it has already decided the hours. If your offer letter quotes a weekly rate and your pay stub is hourly, the two will only match on a full week, and a part-time schedule is where the difference lands.

A lookback average, not the last salary

The second thing the eight results skip is what goes into the week. Most policies, and every calculator on page one, treat a bonus as an extra payment stacked on top of the formula. An average-based policy does the opposite: the bonus goes into the week of pay first, and then the weeks multiply it.

The two conventions are not close. Take a $46,800.00 salary, which is $900.00 a week, and a $5,200.00 bonus paid inside the last 52 weeks — $100.00 a week. A 12-week package under each convention:

The same $5,200.00 bonus, counted two ways

$4,000.00 apart on identical facts. Outside the formula the bonus is one payment the weeks never touch, so the total is the severance plus the bonus. Inside the week it is multiplied by 12 along with the rest of the week, so the total is the severance alone and there is nothing left to add. Which one applies is written in the plan or the separation agreement; the phrase to look for is whether pay is averaged over the 52 weeks before separation, or whether the bonus is listed as a separate line.

One page in the eight results does average something, and it is worth knowing exactly what. The federal severance worksheet says the weekly rate of basic pay “for employees with variable work schedules is determined based on the weekly average for the last position held by the employee during the 26 biweekly pay periods immediately preceding the involuntary separation”. That is a real lookback — 26 biweekly periods is a year — but it averages the schedule, not a bonus, and it applies to a federal employee whose hours move. It is the closest thing on page one to this section, and it is a different quantity.

The gross-up: the package that nets what was promised

A severance is normally quoted gross, and that direction is easy. The hard direction is the one a promise creates: someone says “you walk away with $10,000.00”, and payroll has to find the gross payment that leaves exactly that much after withholding. Dividing by the rate is the wrong move, because the tax is a share of the gross, not a share of the net.

The arithmetic is one division. Gross is the net divided by one minus the rate: at 22%, $10,000.00 ÷ 0.78 is $12,820.51, and 22% of $12,820.51 is $2,820.51, which leaves $10,000.00.

What has to be paid so that the net comes out at the figure promised

Multiply the net by 1.22 instead and the answer looks close — $12,200.00 — but 22% of that is $2,684.00 and what is left is $9,516.00, which is $484.00 short of the promise. The gap grows with the rate: at 37% the difference between dividing by 0.63 and multiplying by 1.37 is over a thousand dollars on a $10,000.00 net. Every row above checks in both directions, so a pay stub can be tested against it rather than trusted.

The regulation’s own worked example is the two-rate version of the same calculation. A $1,000,000.00 net bonus sat across two rates — a flat rate on the first $1,000,000.00 of supplemental wages and the highest rate above it — and the regulation prints the answer: a gross payment of $1,384,615.38, with $384,615.38 withheld. That answer is checkable from the method: $250,000.00 at 25% plus $134,615.38 at 35% is $384,615.38, and $1,384,615.38 less that is exactly $1,000,000.00. The regulation also says plainly that the example takes account of income tax withholding only “and not Federal Insurance Contributions Act taxes”, which is the same boundary this page draws.

Why the rate is an input here rather than a printed constant: the regulation gives an employer two ways to withhold on a lump-sum payment — a flat rate, or the aggregate method that folds the payment into a normal payroll period — and which one was used is not visible from outside the payroll system. It shows up on the stub, so the stub is where the rate comes from. Enter the rate you were actually withheld at, or 0 to see the gross figure on its own.

WARN notice is not severance

The thing most often confused with a severance package is the WARN notice, and the confusion costs people weeks. The sections read for this page require notice; they do not require a payment. Section 2102(a) is a sentence about time: “An employer shall not order a plant closing or mass layoff until the end of a 60-day period after the employer serves written notice of such an order”.

Two details in the same section matter more than they look. An “employment loss” is defined as “an employment termination, other than a discharge for cause, voluntary departure, or retirement”, so a resignation is not one; and part-time employees are excluded from the counts that trigger the duty. Neither fact tells you what your package is worth, and this page does not pretend otherwise: the 60 days is time on the payroll, the severance starts after the last day, and whether a payment made in place of the notice period counts toward the package is a question about the agreement, not about arithmetic.

What the eight results do not say

The eight organic results for this phrase were opened on 2026-10-31. Seven answered and were word-counted with scripts and styles stripped. Three terms were counted on each: hourly, average, and the phrase gross up.

The single hourly hit is severancecalc.com mentioning “an hourly retail role” in a sentence about industry adjustments, not a rate input. The four average hits are two navigation links (“Average Severance Package”), one section heading on industry ranges, and the OPM sentence quoted above about variable schedules. Gross up is zero on all seven: the word “gross” does appear, five times across the seven, always as “gross package” or “gross before deductions” — the easy direction, never the reverse calculation. The eighth result is a one-page IRS PDF on a federal severance computation; it downloaded but could not be read here, so it is not in the table and it is not counted as a zero.

What this page does not do

• No state law. No state statute was read for this page, so nothing here is a state-law answer. Some states have their own separation rules; this page quotes none of them.
• No FICA and no state or local income tax. The withholding rate is whatever you type. The regulation’s own gross-up example excludes FICA explicitly, and so does this page.
• No cap. Many plans cap the weeks or the dollars. This page multiplies years by weeks and stops; if your plan caps, the capped figure is the one to compare against, not this one.
• No eligibility test. Nothing here says whether you are owed severance, or whether a release agreement is required to get it.
• No plan rules and no negotiation. How a part-year is rounded, whether a bonus counts, and what a release waives are written in the plan or the agreement.
• No paid-out vacation. Accrued time paid at separation is a separate line with its own rules and its own tax treatment; it is not inside the weeks of pay here.
• No WARN determination. The thresholds are printed above. Whether a particular layoff crosses them, and what the remedy is, is not something this page can see.

Questions people actually ask

Related pages

General information only — not tax, legal or payroll advice. The supplemental-wage rules are quoted from 26 CFR 31.3402(g)-1, and the notice thresholds from 29 U.S.C. 2101 and 2102, all read on 2026-10-31. No state law, no FICA, no plan rules, and no eligibility test.