Severance Pay Calculator

Annual Rate of Basic Pay: Years of Service: Age (Years and Months):

*The Severance Pay Calculator is based on the U.S. Office of Personal Management calculation of severance pay.

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How to Use the Severance Pay Calculator

Instructions:

Follow these steps to calculate your severance pay:

Enter Your Annual Rate of Basic Pay:
- Input your annual salary or basic pay in the designated field. This is the total amount you earn in a year before taxes and deductions.
Enter Your Years of Service:
- Input the total number of years you have worked at your current job. This should be a whole number representing your complete years of service.
Select Your Age (Years and Months):
- Choose your age from the dropdown menu. The age is broken down into years and months to accurately apply the age factor in the calculation.
Click “Calculate Severance Pay”:
- After filling in all the required fields, click the “Calculate Severance Pay” button. This will process your inputs and generate the results.

Inputs Required:

Annual Rate of Basic Pay:
- This is your yearly salary or basic pay before any deductions. Make sure to enter this amount accurately to get the correct calculation.
Years of Service:
- This is the total number of years you have worked with your employer. Only enter full years of service.
Age (Years and Months):
- Select your current age, specified in years and months, from the dropdown menu. This will be used to adjust the severance pay based on your age.

Calculate Button and Results:

Calculate Severance Pay:

Clicking this button will compute your severance pay based on the inputs you provided. The results will be displayed in the section below the button.

Results Explanation:

Basic Severance Pay:
- This is the initial amount of severance pay calculated based on your annual pay and years of service without any adjustments.
Adjusted Severance Pay:
- This is the basic severance pay adjusted by the age factor. It takes into account your age at the time of severance.
Total Severance Pay:
- This is the final amount you are entitled to, considering the maximum cap on severance pay. It is the lower amount between the adjusted severance pay and the capped amount.
Biweekly Severance Pay:
- This represents the portion of your severance pay you would receive every two weeks, aiding in financial planning.
Weeks of Severance Pay:
- This is the total number of weeks you will receive severance pay, calculated by dividing the total severance pay by your weekly rate.

Understanding the Factors

Age Factor

The age factor plays a significant role in determining the adjusted severance pay. As employees age, the multiplier used in the calculation increases, reflecting the higher value placed on severance for older employees. This adjustment ensures fair compensation considering an employee’s age at the time of severance.

How the Age Factor Influences Severance Pay:

The severance pay calculation includes an adjustment based on the employee’s age. This is because older employees often have more difficulty finding new employment and may need additional financial support.
The age factor is a multiplier that increases with the employee’s age. For example, an employee under 40 years old might have a factor of 1.0, while an employee aged 50 might have a factor of 2.0.
This means that an older employee will receive a higher severance pay compared to a younger employee with the same years of service and annual pay.

Age Factor Summary:

Under 40 Years: The factor starts at 1.0.
40 to 49 Years: The factor increases gradually, typically by small increments such as 0.025 or 0.05 for every few months.
50 to 64 Years: The factor continues to rise, reaching up to around 3.5 for those close to 65 years old.
65 Years and Above: The factor peaks at around 3.5, ensuring that employees of retirement age receive the maximum multiplier for their severance pay.

Years of Service

The number of years you have worked for your employer significantly impacts your severance pay calculation. The longer you have been with the company, the higher your severance pay will be.

How Years of Service Affect the Calculation:

Severance pay is typically calculated based on the number of complete years of service. This means that an employee who has worked longer with the company will receive more severance pay.
The calculation method differs based on whether the employee has worked for less than or more than 10 years.

Under 10 Years of Service:

If you have worked for less than 10 years, your basic severance pay is calculated as one week of pay for each year of service.
Example: If you have worked for 8 years, your basic severance pay will be 8 weeks of your weekly rate.

Over 10 Years of Service:

If you have worked for more than 10 years, the calculation changes to provide additional compensation for the extra years of service.
For the first 10 years, you will receive one week of pay for each year of service.
For any years beyond 10, you will receive two weeks of pay for each additional year.
Example: If you have worked for 15 years, your basic severance pay will be calculated as follows:
- First 10 years: 10 weeks of pay.
- Additional 5 years: 5 * 2 = 10 weeks of pay.
- Total basic severance pay: 10 + 10 = 20 weeks of pay.

Understanding these factors ensures that you can accurately calculate and comprehend the severance pay you are entitled to, considering both your age and years of service.

Severance Pay Age Factor Table

Age (Years)	Factor
Under 40	1.0
40 years 3 months	1.025
40 years 6 months	1.05
40 years 9 months	1.075
41 years 0 months	1.1
41 years 3 months	1.125
41 years 6 months	1.15
41 years 9 months	1.175
42 years 0 months	1.2
42 years 3 months	1.225
42 years 6 months	1.25
42 years 9 months	1.275
43 years 0 months	1.3
43 years 3 months	1.325
43 years 6 months	1.35
43 years 9 months	1.375
44 years 0 months	1.4
44 years 3 months	1.425
44 years 6 months	1.45
44 years 9 months	1.475
45 years 0 months	1.5
45 years 3 months	1.525
45 years 6 months	1.55
45 years 9 months	1.575
46 years 0 months	1.6
46 years 3 months	1.625
46 years 6 months	1.65
46 years 9 months	1.675
47 years 0 months	1.7
47 years 3 months	1.725
47 years 6 months	1.75
47 years 9 months	1.775
48 years 0 months	1.8
48 years 3 months	1.825
48 years 6 months	1.85
48 years 9 months	1.875
49 years 0 months	1.9
49 years 3 months	1.925
49 years 6 months	1.95
49 years 9 months	1.975
50 years 0 months	2.0
50 years 3 months	2.025
50 years 6 months	2.05
50 years 9 months	2.075
51 years 0 months	2.1
51 years 3 months	2.125
51 years 6 months	2.15
51 years 9 months	2.175
52 years 0 months	2.2
52 years 3 months	2.225
52 years 6 months	2.25
52 years 9 months	2.275
53 years 0 months	2.3
53 years 3 months	2.325
53 years 6 months	2.35
53 years 9 months	2.375
54 years 0 months	2.4
54 years 3 months	2.425
54 years 6 months	2.45
54 years 9 months	2.475
55 years 0 months	2.5
55 years 3 months	2.525
55 years 6 months	2.55
55 years 9 months	2.575
56 years 0 months	2.6
56 years 3 months	2.625
56 years 6 months	2.65
56 years 9 months	2.675
57 years 0 months	2.7
57 years 3 months	2.725
57 years 6 months	2.75
57 years 9 months	2.775
58 years 0 months	2.8
58 years 3 months	2.825
58 years 6 months	2.85
58 years 9 months	2.875
59 years 0 months	2.9
59 years 3 months	2.925
59 years 6 months	2.95
59 years 9 months	2.975
60 years 0 months	3.0
60 years 3 months	3.025
60 years 6 months	3.05
60 years 9 months	3.075
61 years 0 months	3.1
61 years 3 months	3.125
61 years 6 months	3.15
61 years 9 months	3.175
62 years 0 months	3.2
62 years 3 months	3.225
62 years 6 months	3.25
62 years 9 months	3.275
63 years 0 months	3.3
63 years 3 months	3.325
63 years 6 months	3.35
63 years 9 months	3.375
64 years 0 months	3.4
64 years 3 months	3.425
64 years 6 months	3.45
64 years 9 months	3.475
65+ years	3.5

Interpreting Your Results

What is Basic Severance Pay?

Basic severance pay is the initial amount calculated based on your annual rate of basic pay and the number of years you have served your employer. It represents the foundational amount you are entitled to before any adjustments for age or other factors.

How is Basic Severance Pay Calculated?

For employees with less than 10 years of service, the basic severance pay is calculated as one week of pay for each year of service.
For employees with more than 10 years of service, the calculation changes:
- The first 10 years are calculated as one week of pay for each year.
- Any additional years beyond 10 are calculated at two weeks of pay for each year.

Example: If you have worked for 15 years, your basic severance pay would be:

First 10 years: 10 weeks of pay.
Additional 5 years: 5 years * 2 weeks/year = 10 weeks of pay.
Total basic severance pay: 10 weeks + 10 weeks = 20 weeks of pay.

What is Adjusted Severance Pay?

Adjusted severance pay is the basic severance pay amount adjusted by a factor that accounts for the employee’s age at the time of severance. This adjustment ensures that older employees, who might find it harder to secure new employment, receive fair compensation.

How is the Adjustment Based on Age Factors?

The age factor is a multiplier that increases with age. For example, an employee under 40 years old might have a factor of 1.0, while an employee aged 50 might have a factor of 2.0.
The basic severance pay is multiplied by the age factor to determine the adjusted severance pay.

What is the Cap on Severance Pay?

The total severance pay is subject to a maximum limit, ensuring that severance payments do not exceed a predefined cap. This cap is typically set at the equivalent of one year’s salary.

How is Total Severance Pay Determined?

After calculating the adjusted severance pay, it is compared to the maximum allowable severance pay (the cap).
The total severance pay is the lower amount between the adjusted severance pay and the capped amount.

Example: If the adjusted severance pay is $75,000 and the cap is $52,000 (one year’s salary), the total severance pay would be $52,000.

What is Biweekly Severance Pay?

Biweekly severance pay is the portion of the total severance pay that you would receive every two weeks. It breaks down the total severance amount into manageable, periodic payments.

Relevance for Ongoing Financial Planning

Biweekly severance pay helps in planning your finances by providing regular income similar to your paychecks.
It ensures a steady cash flow, making it easier to manage expenses during the period after employment ends.

How are the Total Weeks of Severance Pay Calculated?

The total weeks of severance pay represent the number of weeks for which you will receive severance payments. It is calculated by dividing the total severance pay by your weekly rate of pay.

Example: If your total severance pay is $20,000 and your weekly rate of pay is $1,000:

Total weeks of severance pay = $20,000 / $1,000 = 20 weeks.

FAQ Section for Severance Pay Estimation Worksheet

Q: What is severance pay?

A: Severance pay is a payment authorized under 5 U.S.C. 5595 and 5 CFR part 550, subpart G, for full-time and part-time employees who are involuntarily separated from Federal service and meet other conditions of eligibility.

Q: Who is eligible for severance pay?

A: Eligibility for severance pay includes full-time and part-time employees who are involuntarily separated from Federal service and meet specific conditions outlined in the regulations.

Q: How is the basic severance pay allowance calculated?

A: The basic severance pay allowance consists of one week of pay at the rate of basic pay for each full year of creditable service through 10 years, and two weeks of pay for each full year of service beyond 10 years. Additionally, 25% of the otherwise applicable amount is added for each full 3 months of creditable service beyond the final full year.

Q: What is the age adjustment allowance?

A: The age adjustment allowance augments the basic severance pay by 2.5% for each full 3 months of age over 40 years.

Q: What is considered the "rate of basic pay"?

A: The rate of basic pay includes the rate of pay fixed by law or administrative action for the position, including applicable premiums such as annual premium pay, law enforcement availability pay, and locality payments. It excludes additional pay of any other kind.

Q: How do I use the Severance Pay Estimation Worksheet?

A: Follow these steps to estimate your severance pay:

Enter your annual rate of basic pay.
Calculate your weekly rate by dividing the annual pay by 2,087 and multiplying by 40.
Determine your years of service and apply the correct calculation method based on whether it is less or more than 10 years.
Multiply the weekly rate by the years of service to get the basic severance pay.
Adjust the basic severance pay using the age factor if you are over 40.
Compare the adjusted severance pay with the maximum allowable amount to determine the total severance pay.

Q: What should I do if my age is below 40?

A: If your age is below 40 years and 3 months, use a factor of 1 for the age adjustment allowance.

Q: Can you provide an example of a severance pay calculation?

A: Yes, here’s an example:

Annual Rate of Basic Pay: $73,619
Weekly Rate: ($73,619 / 2,087) x 40 = $1,411
Years of Service: 18
- Adjusted Years of Service: 18 – 10 = 8; 8 x 2 = 16; 16 + 10 = 26
Basic Severance Pay: $1,411 x 26 = $36,686
Age Adjustment Factor for 52 years: 2.2
Adjusted Severance Pay: $36,686 x 2.2 = $80,709.20
Maximum Severance Pay: $1,411 x 52 = $73,372
Total Severance Pay: Min($80,709.20, $73,372) = $73,372
Biweekly Severance Payment: $1,411 x 2 = $2,822
Number of Weeks of Severance Payments: ($73,372 / $2,822) x 2 = 52 weeks

Q: What factors are used in severance pay computations?

A: The computations consider the annual rate of basic pay, years of service, and age adjustment factors.

Q: Can I receive severance pay if I have previously received it?

A: The worksheet assumes that the employee has not previously received severance pay based on an earlier involuntary separation. Contact your HR office for specific cases.

Q: What is the maximum amount of severance pay payable?

A: The maximum severance pay payable is the equivalent of one year’s pay (52 weeks).

Q: What should I do if I have more questions about my severance pay?

A: Contact your agency’s human resources office for more detailed and personalized information regarding your severance pay entitlement.

Disclaimer: The content provided on this webpage is for informational purposes only and is not intended to be a substitute for professional advice. While we strive to ensure the accuracy and timeliness of the information presented here, the details may change over time or vary in different jurisdictions. Therefore, we do not guarantee the completeness, reliability, or absolute accuracy of this information. The information on this page should not be used as a basis for making legal, financial, or any other key decisions. We strongly advise consulting with a qualified professional or expert in the relevant field for specific advice, guidance, or services. By using this webpage, you acknowledge that the information is offered “as is” and that we are not liable for any errors, omissions, or inaccuracies in the content, nor for any actions taken based on the information provided. We shall not be held liable for any direct, indirect, incidental, consequential, or punitive damages arising out of your access to, use of, or reliance on any content on this page.

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