Severance Pay Calculator
Estimate your severance package: base severance pay, unused PTO payout, and COBRA subsidy. Calculate total separation value before signing an agreement.
Reviewed for accuracy by Marcus Webb and the Blueprint Dynamics editorial team (last updated July 2026). Our calculators use primary-source formulas and are cross-checked against IRS publications, Fannie Mae guidelines, and Federal Reserve data. Learn more about our methodology.
Estimate total severance package including base pay, PTO payout, and COBRA
Total Severance Package
$12,046
Severance is negotiable. There is no federal law requiring it. PTO payout laws vary by state. COBRA maximum is 18 months. Consult an employment attorney before signing any separation agreement.
Is severance pay legally required?
No federal law in the United States requires employers to pay severance. The Fair Labor Standards Act (FLSA) does not mandate it. Severance is offered at the employer's discretion — typically as consideration for the departing employee signing a release of claims (waiving the right to sue the company). The release is what makes the severance agreement legally binding. Without a signed release, employers generally pay only final wages and any accrued PTO that state law requires to be paid out.
Standard severance formulas
The most common industry formula is 1–2 weeks of base salary per year of service. A 7-year employee at this rate would receive 7–14 weeks of pay. Variations: non-exempt (hourly) employees often receive 1 week per year; exempt (salaried) employees more commonly receive 2 weeks per year. Executives typically negotiate severance independently — "golden parachutes" of 6–24 months of salary are common for C-suite roles, often including accelerated vesting of equity, continued benefits, and non-compete restrictions. Companies facing mass layoffs often offer flat minimums (2–4 weeks for all employees) rather than tenure-weighted formulas to simplify administration.
The Age Discrimination in Employment Act (ADEA) and your rights
If you are 40 or older and are being asked to sign a severance agreement that releases age discrimination claims, the ADEA gives you specific protections. You have at least 21 days to consider the agreement before signing (45 days if the layoff is part of a group reduction in force). You have 7 days after signing to revoke your acceptance — the agreement is not enforceable until after this 7-day window. The agreement must specifically reference ADEA claims and advise you to consult an attorney. These protections apply automatically by law — they cannot be waived in the agreement.
What to negotiate in a severance package
Most employees don't realize that severance terms are often negotiable, especially for longer-tenured employees. Common areas to negotiate: extended pay duration (ask for more weeks), health insurance continuation beyond COBRA (employer pays premiums for 1–3 months), accelerated vesting of unvested equity, outplacement services, neutral references or specific reference language, non-disparagement clauses that are mutual (not just one-directional), and extended exercise windows for stock options. The employer wants the release signed. Use that leverage thoughtfully — especially if you believe you have a discrimination or wrongful termination claim worth reviewing with an employment attorney before you sign.