Severance Pay Calculator
Severance on redundancy, from weeks of pay per completed year of service.
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Formula
How the calculation works
Severance is built from three numbers: a weekly wage, completed years of service, and a weeks-per-year multiplier. At 28,000 a month the weekly wage is 6,462, six completed years at two weeks each give twelve weeks, and twelve weeks pay 77,538.
The monthly-to-weekly conversion is the step people skip. Twelve months of salary divided by 52 weeks gives the weekly figure, not the monthly divided by four. Dividing by four overstates the weekly wage by about 8%, because a month is longer than four weeks, and that error carries straight into the total.
Completed years is the second place the arithmetic bites. Six years and six months counts as six, because the seventh year is not finished. Some schemes do round up past six months and others cap the number of years that count at all, so the multiplier and the cap both have to come from the actual terms rather than from the tool.
Common mistakes
- Dividing the monthly wage by four for the weekly figure instead of multiplying by twelve and dividing by 52.
- Rounding a part-year up to a full year when the scheme counts completed years only.
- Using a weeks-per-year figure from a different country's scheme. The multiplier is the part that varies most.
When to use it
- Use it for a working estimate before a redundancy conversation, and to check that a settlement offer is in the right region.
- It is not a legal entitlement calculation. Caps, minimum service periods and rounding rules differ by country, and a real settlement should be checked against your own contract and law.
Worked example
At 28,000 a month over 6 years 6 months at 2 weeks a year, six years count and give 77,538.
Common questions
Should 6 years 6 months round up to 7?
This counts completed years, so six. Many jurisdictions round up once six months have passed, but the rule varies by country and contract, so check yours.
How many weeks per year should I use?
It is set by law or contract, which is why the tool asks. There is no single correct figure, so take it from your own terms.
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