Severance Calculator

Evaluating Your Separation Package

Severance packages offer financial bridges during job transitions, but their true value isn't always obvious. Beyond base pay continuation, packages may include benefits continuation, stock vesting acceleration, outplacement services, and non-compete considerations. The calculator evaluates total package value, helping you understand what's offered and negotiate effectively.

Receiving a severance offer triggers emotional response, but this is fundamentally a business negotiation. Understanding what each component is worth, what's standard for your industry and level, and what trade-offs you're making enables informed decisions.

Know what you're signing.

Components of Severance

Typical severance packages include several elements. Cash payment provides weeks or months of base salary, sometimes continuing pay schedule, sometimes as lump sum. Benefits continuation extends health insurance (often paying COBRA premiums) for a defined period. Unused PTO may be paid out depending on company policy and state law. Equity provisions may accelerate unvested stock or extend exercise windows. Outplacement assistance provides job search support and career coaching. Other elements might include retention of equipment, references, or non-disparagement terms.

Calculating Cash Value

Base severance is typically stated as weeks of pay. Convert to total value:

Severance weeks × Weekly salary = Cash severance amount

For $150,000 annual salary with 12 weeks severance: $150,000 / 52 × 12 = $34,615

Consider whether payment is lump sum or continuation. Lump sum provides immediate access; continuation may include ongoing benefit eligibility but delays full access.

Benefits Continuation Value

Health insurance continuation can be substantial. COBRA premiums often run $1,500-$2,500 monthly for family coverage.

The calculator adds benefits value to cash severance for total package assessment.

Stock and Equity Considerations

Equity treatment varies significantly. Unvested RSUs may be forfeited, prorated, or accelerated. Stock options may require exercise within 90 days of termination, or extended windows may be negotiated.

Evaluate each equity component's value based on current price and vesting schedule. Acceleration of substantial unvested equity can be more valuable than additional weeks of cash severance.

Tax Implications

Severance payments are taxable income. Large lump sums may push you into higher brackets for the year.

Consider timing strategies—if leaving in December, you might negotiate January payment to push income into the next tax year (if you expect lower income then).

Consult a tax professional for significant packages.

Non-Compete Evaluation

Severance may be tied to signing non-compete agreements restricting future employment. The calculator can help evaluate this trade-off:

Non-compete cost = Potential income loss during restriction period Non-compete value = Additional severance offered for signing

If offered $20,000 additional severance for 12-month non-compete in an industry where you'd expect $150,000 salary, you're accepting restriction worth potentially $150,000 for $20,000 in return.

What's Negotiable

Nearly everything in severance packages can be negotiated—they're not fixed by law. Common negotiation points include additional weeks of cash, extended benefits duration, accelerated vesting or extended option exercise periods, removal or modification of restrictive covenants, outplacement services, positive reference terms, and equipment retention.

The calculator helps identify which components offer most leverage for your situation.

Standard Severance by Level

While packages vary, general expectations by employee level:

Entry/Mid-level: 1-2 weeks per year of service Senior/Manager: 2-3 weeks per year of service Director/VP: 3-4 weeks plus potential acceleration Executive: Negotiated employment agreements, often 6-24 months

Knowing standards helps assess whether your offer is competitive.

Legal Review Considerations

For substantial packages, legal review is worthwhile. Employment attorneys can identify concerns in separation agreements, assess enforceability of restrictions, and sometimes negotiate improvements.

Legal fees often pay for themselves through negotiated improvements.

Timeline Pressures

Companies often impose deadlines for accepting severance—sometimes 21-45 days by law (for older workers), sometimes shorter. Understand your deadline but don't let artificial urgency force premature decisions.

Review, calculate, negotiate, then decide.

Using the Calculator

Enter salary, severance weeks offered, benefits details, equity components, and any restrictions. The calculator shows total package value broken down by component.

Compare to industry standards. Model negotiation scenarios—what if you got 4 more weeks? What if equity accelerated?

Use results to understand your package's true value and negotiate from knowledge.

Severance packages represent significant value but require careful evaluation. The calculator reveals total worth across all components, helping you see beyond headline weeks to actual value. Armed with this analysis, you can negotiate confidently, knowing exactly what you're accepting and what you might reasonably request.