Calculate severance package value with weeks of pay per year of service, benefits continuation, and lump-sum versus installment comparison.
When an employer puts a weeks-per-year-of-service offer on the table, this tool turns it into dollars: it derives weekly pay from your salary, multiplies by your years of service, adds the value of benefits continuation like paid COBRA premiums, and shows the difference between a lump sum and installments. The number people most often misread is the result itself: severance is not legally required in most U.S. states, so the calculator values the formula you enter, not a right you have. The total is gross of taxes.
A concrete input and expected output from the current implementation.
Input
Annual salary $78,000; 8 years of service; offer of 2 weeks of pay per year of service; employer pays COBRA premiums of $600/month for 3 months.
Expected output
Cash severance: $24,000 (16 weeks at $1,500/week). Benefits continuation: $1,800. Total package value: $25,800. Lump sum: $24,000, or installments of $1,500/week for 16 weeks.
Two weeks per year of service times eight years is sixteen weeks of pay. Weekly pay is $78,000 / 52 = $1,500, so the cash severance is 16 x $1,500 = $24,000; three months of $600 COBRA premiums adds $1,800, for a $25,800 package.
You supply your pay, your years of service, and the offer's multiplier in weeks per year of service. The tool converts pay to a weekly rate (annual salary divided by 52), then multiplies: weeks per year x years of service x weekly pay. At $78,000 a year, 8 years, and 2 weeks per year, that is $1,500 per week x 16 weeks = $24,000.
Benefits continuation is priced at months of paid premiums (monthly premium times months) and added to the cash total, so a package with employer-paid COBRA is worth more than the paycheck number alone. The lump-sum versus installment comparison shows the same gross total paid once or spread across the severance period, with the per-payment amount and how long payments run.
No, it works in gross, pretax dollars. Severance is supplemental wages, so payroll may withhold at a flat 22% federally plus your state's rate, but the real tax bill depends on your total income for the year. Use the result to compare offers, then estimate take-home separately.
In most of the United States, yes. No federal law mandates severance pay and most states are at-will, so severance exists only when a contract, union agreement, or company policy creates it. Employers often tie it to signing a release of claims, so the calculator's result is a negotiating baseline, not an entitlement.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
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