📜 Severance Pay Calculator
Estimate your severance package under N+1 and 2N formulas. Understand your labor law rights and what compensation you may be entitled to upon termination.
Employment Details
Additional Factors
📊 Severance Package Estimate
📖 Usage Examples
💼 Mid-Level Manager: Standard Layoff
James, earning $6,500/month with 8 years of service, is laid off due to restructuring.
⚖ Wrongful Dismissal: 2N Scenario
Maria, 6 years at $4,800/month, was dismissed without cause and without proper procedure. Her average 12-month salary including bonuses is $5,300.
📅 Senior Employee: Maximizing Package
Robert, 15 years at $9,200/month, is offered voluntary separation with enhanced terms.
❔ Frequently Asked Questions
N represents your years of service, and +1 is one additional month of pay. Under N+1, you receive your monthly salary multiplied by your years worked, plus one extra month. For example, 5 years at $4,000/month = (5 × $4,000) + $4,000 = $24,000. This formula is common in many European and Asian jurisdictions.
2N (double the N+1 rate) typically applies in cases of wrongful, unfair, or constructive dismissal where proper procedures were not followed. This is the maximum statutory compensation in many labor law systems. Courts or labor tribunals must generally determine that the dismissal was unlawful for 2N to apply, and it often requires legal proceedings.
Yes, in most jurisdictions, accrued but unused vacation days must be paid out upon termination, separate from severance. This is typically calculated as your daily rate multiplied by unused vacation days. Some jurisdictions also require payout of unused sick leave, though this varies widely.
This depends on your jurisdiction and contract. Many labor laws use the average monthly earnings over the last 12 months, which includes regular bonuses and commissions. Our "Average Monthly Salary" field allows you to input this average for the 2N calculation. For the N+1 calculation, only your base monthly salary is typically used.
Yes. In the US and most countries, severance pay is considered taxable income subject to income tax and FICA (Social Security and Medicare) withholding. Some jurisdictions offer partial tax exemptions for severance, particularly for involuntary termination. The tax treatment can significantly reduce your actual received amount.
Yes, you can and should negotiate. If you're offered a separation agreement, you typically have a window (often 21-45 days) to review and counter-offer. Key negotiation points include: extended health insurance (COBRA subsidy), accelerated vesting of equity, a neutral reference, outplacement services, and release from non-compete clauses. Always consult an employment attorney before signing.
📜 About the Severance Pay Calculator
This calculator models the two most widely recognized severance formulas: N+1 and 2N. N represents your years of service, and the formula produces a total severance amount expressed in months of your salary. N+1 is the standard formula used in many jurisdictions for ordinary termination scenarios (layoffs, redundancy, mutual separation). 2N generally represents the maximum statutory compensation available in cases of wrongful, unfair, or constructive dismissal where proper legal procedures were not followed.
Beyond the core formulas, the calculator also accounts for additional compensation that often accompanies a separation: payout of accrued but unused vacation days (calculated at your daily rate), and pay in lieu of notice (the salary you would have earned during your notice period if you worked it instead of receiving a lump sum). These additional components can significantly increase your total package and should not be overlooked.
It is important to understand that severance laws vary dramatically by jurisdiction. The N+1 and 2N formulas are statutory in many countries but are not guaranteed by federal law in the United States, where severance is generally a matter of company policy, employment contract, or negotiation. The WARN Act requires 60 days of notice or pay in lieu for qualifying mass layoffs, but this is distinct from severance. Our Severance Packages Explained guide covers the full landscape, including health coverage, equity treatment, and negotiation strategies.
Use this calculator to: estimate what a fair severance package might look like before entering negotiations, compare a voluntary separation offer against the statutory formula, understand how your years of service translate to potential compensation, and arrive at a negotiation baseline backed by a recognized formula.