Job ToolsetWhat 8 years of tenure is really worth
The day Elena was laid off, HR slid a severance agreement across the table and said, "This is our standard package." The offer was four weeks of pay. Elena had been there 8 years. She signed nothing that day, went home, and ran the math she should have known before walking in. Using the most common severance formula, one week of pay per year of service, her tenure pointed toward eight weeks, double what they'd offered. That one calculation was worth weeks of her salary.
Severance pay is rarely required by law in the United States, it's typically a benefit offered at the employer's discretion or written into a contract or policy. But because it's negotiable, the size of a package varies enormously, and there are well-established benchmarks. The most widely used formula is one to two weeks of base pay per year of service. For Elena, earning $1,500/week after 8 years, that's a range from $12,000 (8 weeks) to $24,000 (16 weeks), depending on which multiplier applies.
The number on the table is the starting point, not the ceiling. Senior roles, executives, and longer-tenured employees often command more generous multiples. Some packages also bundle in continued health coverage, a prorated bonus, payout of unused PTO, or outplacement services, each of which has real cash value beyond the headline weeks of pay.
And severance is taxed like a bonus, not like wages. As supplemental income, it's commonly withheld at the flat 22% federal rate, plus Social Security, Medicare, and state tax. A $12,000 severance check can net closer to $8,500 after withholding, so the gross figure overstates what actually reaches your account. Knowing this helps you budget the bridge between jobs realistically.
This calculator estimates your package using the same formulas employers use. Enter your years of service, your weekly pay, and the multiplier, and see what a typical severance offer should look like, so you can recognize a low-ball offer before you sign it away.