Loan Severance Pay Calculator
A severance offer is three or four separate numbers wearing one coat. This calculator unwraps them: the service-based severance itself, any notice-period pay, and the unused PTO payout — each visible, then totaled.
There is no US federal law requiring severance (the WARN Act’s notice rules are the main exception, for large layoffs). One week per year of service is the most common policy shape; two weeks per year appears in professional and executive plans. Whether PTO pays out depends on your state and the written policy — about half of states require it. This is an estimator for planning and negotiation, not legal advice.
How it works
Weekly pay = annual salary ÷ 52. Severance = weekly pay × years × weeks-per-year × any enhancement multiplier (a negotiated bump, a release-of-claims premium, or an executive contract factor). Notice pay = weekly pay × notice weeks, when the notice period is paid separately rather than folded in. PTO payout = unused days × (salary ÷ 260 working days). The total is the sum — the number to compare against the letter you were handed.
Formula & worked example
Formula: Weekly pay = salary ÷ 52. Severance = weekly pay × years of service × weeks-per-year × enhancement. Notice pay = weekly pay × notice weeks. PTO payout = unused days × salary ÷ 260. Total = severance + notice + PTO.
Worked example: $78,000 salary, 6 years, 1 week per year: weekly $1,500 × 6 = $9,000 severance and package total.
When to use this
- An offer letter arrived and you need its components priced separately.
- You are preparing to negotiate and want specific dollar asks.
- You are planning a runway: how many months the package covers.
- You are comparing salary continuation against a lump sum.
How to use it, step by step
- Enter salary and completed years of service.
- Set the weeks-per-year from the policy or the offer (1 is the common standard).
- Leave the multiplier at 1.0 for the offer as written; test higher values as negotiation scenarios.
- Add separate notice weeks and PTO days only if the letter lists them separately.
- Read each component, then the total — negotiate line by line.
What the inputs mean
| Input | What it is | Typical values |
|---|---|---|
| Weeks per year | The policy’s severance formula | 1 standard; 2 professional/executive; 0.5 lean |
| Enhancement | Multiplier for negotiated or contractual bumps | 1.0 as offered; 1.25–1.5 negotiation scenarios |
| Notice weeks | Paid notice period when separate from severance | 0 if folded in; WARN situations run 8+ |
| PTO days | Unused accrued days the policy/state pays out | 0–15 commonly banked |
Another worked example
$95,000, 11 years, 2 weeks per year: severance $40,192. Four weeks of separate notice adds $7,308, and 10 PTO days add $3,654 — a $51,154 package. Notice especially how the "small" lines total over $10,000: they are the ones that vanish from a one-number offer.
Frequently asked questions
How much severance is 6 years at $78,000?
Weekly pay is $78,000 ÷ 52 = $1,500. At the standard 1 week per year: 6 weeks × $1,500 = $9,000. It is the most common shape of offer — and the baseline from which any negotiation starts, not a legal entitlement.
What does a stronger package look like?
Eleven years at $95,000 with 2 weeks per year: severance $40,192. Add 4 weeks of separate notice pay ($7,308) and 10 unused PTO days ($3,654) and the package totals $51,154. Seeing the components separately is the point — a single lump figure hides which lines are missing.
Is severance pay required by law?
Not in the US generally. Exceptions: a written policy or contract that promises it, a collective bargaining agreement, or WARN Act remedies after a covered mass layoff without proper notice. Some states regulate final-pay timing and PTO payout. Absent those, severance is the employer’s choice — which is exactly why it is negotiable.
Should I negotiate severance?
Usually there is room in scope if not in the headline formula: a multiplier bump (1.25× is a common ask), employer-paid COBRA months, a later separation date (which extends benefits and vesting), outplacement, and mutual non-disparagement. You are typically asked to sign a release of claims — for workers 40+, federal law gives you 21 days to consider it. Use them.
How is severance taxed?
As supplemental wages, generally withheld at a flat 22% federal rate if paid separately from regular wages, plus state tax and payroll taxes. The withholding is not the final liability — a $51,154 package in a low-income year often over-withholds. Whether it arrives as a lump sum or salary continuation affects unemployment eligibility timing in some states; ask before choosing.
Does unused PTO have to be paid out?
It depends on the state and the policy. Roughly half the states treat accrued vacation as wages that must be paid; elsewhere the written policy controls, and "use it or lose it" forfeiture can be enforceable. Check your state labor agency’s page — it is a two-minute lookup that decides whether the PTO line belongs in your total.
What is the enhancement multiplier for?
Real packages often carry one: an extra factor for signing a broad release, a non-compete, a long-service premium, or an executive contract. Model offers at 1.0×, then test 1.25× and 1.5× to see what you are actually asking for in dollars — negotiators respond better to a specific, modest number than to "more".