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Total Severance Value
$0
PTO Payout
$0
Financial Runway
0 mo
Estimate your total severance value and how many months of runway it provides.
$0
PTO Payout
$0
Financial Runway
0 mo
Multiply weekly salary by weeks of pay per year of service, then multiply by years of service to get base severance. Add unused PTO payout (daily pay × unused days) for total value, then divide by monthly expenses for runway.
Severance = Weekly Salary × Weeks/Year × Years of Service + PTO Payout
In most of the United States, severance pay isn't legally mandated unless promised in an employment contract, company policy, or collective bargaining agreement (with exceptions like WARN Act notice requirements for larger layoffs). This means severance offers, when given, are often somewhat negotiable, particularly for longer-tenured or senior employees.
A common (though not universal) severance formula multiplies weekly salary by a set number of weeks (often one or two) for each year of service, meaning longer-tenured employees typically receive proportionally larger packages. Executive or senior-level severance often uses a different structure, sometimes tied to months of salary or a percentage of annual compensation.
Accrued but unused paid time off must be paid out upon termination in many states regardless of whether a severance package is offered, so it's worth confirming this is being paid correctly and not simply absorbed into a severance total in your favor. Health insurance continuation (COBRA) is a separate, often significant cost consideration: without employer subsidy, COBRA premiums can be substantially higher than what you paid as an employee, and should be factored into your true financial runway.
The most useful way to think about a severance offer during a job search is as financial runway: total severance value divided by realistic monthly expenses tells you roughly how long you can search for a new role without additional income. This framing is often more actionable than just looking at the total dollar figure in isolation.
A common formula is one to two weeks of pay for every year of service, though this varies enormously by company policy, position level, and whether severance is required by an employment contract or offered at employer discretion.
In many states, accrued but unused paid time off must be paid out upon termination regardless of severance, though rules vary by state. Whether this is bundled into or separate from a formal severance offer depends on company policy.
Runway depends on the total severance amount divided by monthly living expenses, not just income replacement, since severance is usually a lump sum or continued paycheck for a limited period rather than ongoing salary.
Build a buffer with the Emergency Fund Calculator, or check your budget with the DTI Calculator.
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