Layoff Pay Calculator
Losing a job is stressful enough without doing severance math by hand, and a layoff package is rarely one number. It is usually four: severance based on your years of service, pay for the notice period, a payout for unused vacation, and sometimes a bonus or extra benefit on top. This calculator prices each piece separately from your pay and tenure, in whatever pay frequency you actually know, and adds them into one itemised gross total. One limit up front: the tool prices the package you enter. Whether you are owed any of it is a legal question your contract, your employer’s policy and your state’s rules answer, not this page.
Gross estimates for planning only, not legal or tax advice. Severance is rarely owed by law; your contract, company policy and state rules decide what you actually receive. Consider legal advice before signing a separation agreement.
Quick Answer
For the pre-filled case, an employee on $4,000 a month with 5 years of service, 2 severance weeks per year, 4 weeks of notice and 10 unused vacation days receives $14,769.23 gross: weekly pay of $923.08, severance of $9,230.77 for 10.0 severance weeks, notice pay of $3,692.31 and a vacation payout of $1,846.15.
Key takeaways
- Every piece of a layoff package is weekly pay times weeks, or weekly pay divided by five times days. Get the weekly figure right and the rest is arithmetic.
- US federal law does not require severance at all. The Department of Labor is explicit that it is a matter of agreement, so your offer letter, handbook and separation agreement matter more than any rule of thumb.
- All results here are gross. Severance and notice pay are taxed as wages, and a lump sum in one year can be withheld at a flat 22 percent federal rate before your real bracket is settled at filing.
- The result box grades the severance weeks alone, from a minimal package under 2 weeks to an exceptional one at 26 weeks or more. Notice and vacation money extend your runway beyond that grade.
How to use the layoff pay calculator
Enter your pay the way you know it, then the terms of the package in front of you. Results stay hidden until you click Calculate, and every field explains itself in its tooltip.
- Pay and frequency: type your pay amount and pick hourly, weekly, monthly or annual. Choosing hourly reveals the hours-per-week field; at every other frequency that field is hidden and ignored. If you are comparing an offer stated as pay in lieu of notice, the compensatory notice pay calculator prices that single component on its own.
- Years of service: your full tenure with this employer. Fractions count, so 2.5 prices two and a half years.
- Severance weeks per year: the rate in your offer or company policy. One week per year is the common starting point and two is a strong package. This single input moves the total more than any other, which is why it is the number worth negotiating.
- Notice period and vacation days: the notice weeks in your offer, and the unused vacation days on your balance. Vacation is priced at a fifth of weekly pay per day, the five-day-week convention explained below.
- Other benefits: any prorated bonus, commission or flat extra, added exactly as entered. Then read the itemised result, and if you are weighing the package against walking away from a job you still hold, the salary cut calculator shows the longer-term cost of a reduced salary by comparison.
How layoff pay is calculated
Four components, each built from the same derived weekly pay. The calculator converts your pay to weekly first, then applies the formulas below, which are printed in short form under every result.
Severance = weekly pay × (years of service × severance weeks per year)
Notice pay = weekly pay × notice weeks
Vacation payout = (weekly pay ÷ 5) × unused vacation days
Total layoff pay = severance + notice pay + vacation payout + other benefits
Two conventions inside that math deserve to be said out loud. First, the monthly conversion uses 52 weeks a year, so a $4,000 monthly salary becomes $923.08 a week. Tools that divide a monthly salary by 4.33 get the same figure by a longer route, while tools that simply divide by 4 overstate weekly pay by about 8 percent; if a rival calculator's total looks generous, check its conversion before you trust it. Second, the vacation line divides weekly pay by five, which prices a vacation day as one day of a five-day working week. If you work a four-day week, your real daily rate is a quarter of weekly pay, and this line will understate your payout by a fifth; adjust the day count to compensate, or treat the line as a floor.
The result also grades the package by severance weeks alone, using bands written into the tool: under 2 weeks is minimal, 2 to 4 a short-term cushion, 4 to 8 moderate, 8 to 16 generous, 16 to 26 excellent, and 26 or more exceptional. The grade deliberately ignores notice and vacation money, so a package can grade modestly while still carrying you for months once every line is counted.
Worked example: $4,000 a month, five years, two weeks per year
Every number below is the calculator's own output for the pre-filled inputs, so you can check the tool against the text before trusting it with your own figures.
| Component | Arithmetic | Amount |
|---|---|---|
| Weekly pay | $4,000 × 12 ÷ 52 | $923.08 |
| Severance (10.0 weeks) | $923.08 × (5 years × 2 weeks) | $9,230.77 |
| Notice pay | $923.08 × 4 weeks | $3,692.31 |
| Vacation payout | ($923.08 ÷ 5) × 10 days | $1,846.15 |
| Total layoff pay | Sum of the four lines, other benefits $0 | $14,769.23 |
The 10.0 severance weeks land in the tool's generous band, and the full package equals about 16 weeks of pay once notice and vacation are counted. Two comparison runs show the levers. Drop the rate to one week per year, the figure many policies actually use, and severance halves to $4,615.38 with a total of $10,153.85. Switch the same case to an hourly worker at $25 an hour for 40 hours, weekly pay of $1,000, and three years at one week per year with two weeks of notice, five vacation days and a $500 bonus produces $6,500.00 exactly. Small changes to the weeks-per-year rate beat large changes to everything else.
Know your rights before you sign
Severance feels like a legal entitlement because it is so common, but in the United States it mostly is not one. Knowing which parts of a package are law, which are contract and which are pure goodwill changes how you negotiate.
Severance itself is voluntary at federal level. The U.S. Department of Labor's severance pay page states that the Fair Labor Standards Act has no requirement for severance pay and that it is a matter of agreement between employer and employee. Your entitlement, if any, lives in your employment contract, a collective bargaining agreement, a written company policy or the separation agreement itself. That is also why packages vary so widely, and why a negotiated settlement for a disputed exit is priced differently again, as the employment settlement calculator covers for agreed departures.
Notice has its own law, and it is not severance. The federal WARN Act, summarised on the Department of Labor's WARN Act page, requires larger employers to give 60 days of written notice before mass layoffs and plant closures, or pay in lieu. Several states run mini-WARN laws with lower thresholds, and a few, including Maine and New Jersey, attach severance itself to certain mass layoffs. Ordinary individual layoffs usually carry no statutory notice at all, which is why the notice line in your package is worth checking against your contract rather than assumed.
Some schemes are written down in full. Federal employees are priced by the formula on the U.S. Office of Personnel Management severance pay fact sheet: one week per year for the first ten years, two weeks per year after that, plus an age adjustment. Outside the US, statutory schemes such as the UK redundancy system, priced by the HP redundancy calculator, set minimums by age and tenure. If a written scheme covers you, price it first and treat anything above it as the negotiable part.
The release is the real transaction. Most separation agreements trade the package for your signature on a release of claims. The EEOC's guidance on waivers in severance agreements explains the extra protections for workers aged 40 and over, including at least 21 days to consider a waiver of age discrimination claims and 7 days to revoke after signing. Whatever your age, the practical rules are the same: get the full package in writing, confirm the final paycheque and vacation treatment separately, ask how long health coverage runs and what COBRA will cost, and take advice before signing anything with a deadline attached.
What competing calculators miss
The top results for this keyword each cover part of the package and leave the rest to you:
- JobHopi's layoff pay calculator: the closest match in structure, severance plus notice from a monthly salary, but it stops there. No vacation payout, no other benefits line, and no interpretation of the result.
- Danfio severance calculator: honest framing about contract versus law and a useful side-by-side of formulas, but it prices severance only, from annual salary, so hourly and monthly earners convert by hand and the rest of the package is missing.
- StubMath severance pay calculator: shows its work and adds a withholding preview and a months-of-coverage line, both genuinely useful, but again severance alone, with no notice or vacation components.
- SeveranceCalc: the broadest rival, with state-by-state pages and a gross-to-net estimate, but its state rules are presented as settled outputs rather than starting points, and the itemisation of notice and vacation inside the total is hard to audit.
- FinExplained severance calculator: the most rigorous tax treatment in the set, modelling supplemental withholding in detail, yet it builds in a flat base-weeks amount many employers never offer and prices nothing beyond severance.
- The gap this page fills: any pay frequency converted for you, all four package components itemised on separate lines, an on-page grade for the severance weeks, and the legal framing, voluntary severance, WARN notice, written statutory schemes and the release, kept next to the arithmetic instead of in a footnote.
Frequently asked questions
The common formula is weekly pay multiplied by years of service multiplied by severance weeks per year, with one week per year as the typical starting point. Notice pay, vacation payout and any bonus or other benefits in the package are added on top, which is exactly how this calculator itemises the total.
In the US there is no federal law requiring private employers to pay severance. The Fair Labor Standards Act does not require it, according to the U.S. Department of Labor: severance is a matter of agreement between employer and employee, set by contract, company policy or a collective bargaining agreement. Some states add rules for mass layoffs, and the federal WARN Act requires advance notice for larger layoffs, but notice is not the same thing as severance pay.
Yes. Severance, notice pay and vacation payout are taxed as wages, with federal and state income tax withholding plus Social Security and Medicare taxes. Employers often withhold federal income tax on severance at the flat 22 percent supplemental rate described in IRS Publication 15, which may over-withhold or under-withhold against your actual bracket for the year. This calculator shows gross pay before any tax.
It depends on your state and your employer's policy. Federal law does not require vacation payout. Several states treat accrued vacation as earned wages that must be paid in the final cheque, while others leave it to company policy or the employment contract. The calculator prices vacation as a separate line, at one fifth of weekly pay per unused day, so you can see exactly what is at stake either way.
One to two weeks of pay per year of service is the common range for staff roles, often with two to four weeks of notice pay. Longer service, senior roles and negotiated agreements push higher, and statutory schemes are more generous still: the federal employee formula used by the U.S. Office of Personnel Management pays one week per year for the first ten years and two weeks per year beyond that. Typical is a benchmark for a conversation, not an entitlement.
Often yes. The weeks-per-year figure, extended health coverage, outplacement help and the wording of the release are all commonly negotiated, and an itemised estimate makes the conversation concrete. Read any separation agreement carefully before signing: it usually trades the package for a release of legal claims. Workers aged 40 and over who are asked to waive age discrimination claims get extra legal protection, including a consideration period of at least 21 days under the rules the EEOC explains, so never let a deadline rush you past advice.
Gross. Every figure is before income tax, Social Security and Medicare withholding, and before any deductions your employer applies. The calculator also leaves out your final regular paycheque for time already worked, unemployment benefits and the cost of continuing health coverage under COBRA, all of which change the real size of your runway.
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References
- U.S. Department of Labor. Severance Pay. Accessed October 22, 2026.
- U.S. Department of Labor, Wage and Hour Division. Questions and Answers About the Fair Labor Standards Act (FLSA). Accessed October 22, 2026.
- U.S. Department of Labor, Employment and Training Administration. Worker Adjustment and Retraining Notification (WARN) Act. Accessed October 22, 2026.
- Internal Revenue Service. Publication 15, Employer's Tax Guide. Accessed October 22, 2026.
- U.S. Office of Personnel Management. Severance Pay Fact Sheet. Accessed October 22, 2026.
- U.S. Equal Employment Opportunity Commission. Understanding Waivers of Discrimination Claims in Employee Severance Agreements. Accessed October 22, 2026.
- U.S. Department of Labor. Unemployment Insurance. Accessed October 22, 2026.
- U.S. Department of Labor. Continuation of Health Coverage (COBRA). Accessed October 22, 2026.
- U.S. Department of Labor, Wage and Hour Division. State Labor Offices. Accessed October 22, 2026.
- U.S. Department of Labor. Termination and Final Pay. Accessed October 22, 2026.
This page is general information about how layoff packages are commonly structured. It is not legal or tax advice and it does not work out what any employer owes you. Entitlements depend on your contract, your employer's policies and the law of your state or country; if a package is large or a release is involved, an employment attorney in your state is the right next step.