Severance Package Fairness & Negotiation Leverage Calculator
Benchmark your layoff severance offer against industry formulas (1–4 weeks per year of service), COBRA health coverage value, and legal claim release leverage.
1. Enter Your Case Details Runs in your browser
2. Your result Live Output
Fill in the details on the left to see the result.
Upload your lease, contract, or notice to our core AI workspace.
3. How the rule works
Who this is for
Employees who have been offered a severance agreement and want to compare it with common market benchmarks and understand the legal review periods before they sign.
The benchmarks are negotiating conventions, not legal entitlements. No federal law and very few state laws require severance pay.
What to have ready
- The full severance agreement and any attachments.
- Your salary, bonus plan and equity vesting schedule.
- Your start date and age (for the OWBPA periods).
- Your health insurance cost under COBRA.
The rule
Severance is usually paid in exchange for a release of legal claims. For employees aged 40 or over, the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), says a release of age discrimination claims is valid only if it is written in plain language, refers to the ADEA, advises the employee in writing to consult a lawyer, gives at least 21 days to consider (45 days if part of a group program, with information about who was selected) and allows 7 days to revoke after signing.
California adds its own rules. Labor Code § 206.5 forbids requiring a release of claims for wages already due as a condition of paying them, and Government Code § 12964.5 requires separation agreements that limit disclosure of workplace harassment or discrimination to say the employee has the right to consult a lawyer and at least five business days to consider. The National Labor Relations Board has also scrutinised broad confidentiality and non-disparagement clauses for non-supervisory employees.
Read the official text:
- 29 U.S.C. § 626(f) (OWBPA)
- California Labor Code § 206.5
- U.S. EEOC: understanding waivers in severance agreements
Worked example: four years at $115,000
Lee has worked four years at a $115,000 salary and is offered 4 weeks of pay. Using a common professional benchmark of 2 weeks per year:
Weekly pay = $115,000 / 52 = $2,211.54 Offer = 4 weeks = $8,846.15 Benchmark = 2 weeks x 4 years = 8 weeks = $17,692.31 Plus 3 months COBRA = 3 x $750 = $2,250 (estimated premium) Benchmark package = about $19,942; the gap is a negotiation point, not a legal claim
Common mistakes
- Signing on the spot. If you are 40 or over you are entitled to the review and revocation periods; use them.
- Treating earned pay as part of the severance. Final wages and accrued vacation are owed anyway.
- Overlooking what you give up: the release, any non-disparagement and cooperation clauses.
- Ignoring tax. Severance is taxable wages.
Limits of this tool
- Severance rules vary by state and contract; employment contracts and company plans can create real entitlements.
- Benchmarks vary by industry and seniority and are not evidence of what a court would award.
- The calculator does not value potential legal claims, which is often the real driver of an offer.
Sources were last checked in October 2026. Statutes are amended often; if the official text differs from this page, the official text controls.
4. Clear Next Steps & Statutory Action Plan
- Confirm what is owed regardless of signing: final pay, vacation, bonuses already earned.
- Read the release and note the review and revocation dates.
- Ask for specific improvements in writing, such as more weeks, COBRA, bonus pro-rating or a neutral reference.
5. Frequently Asked Statutory Questions (29 U.S.C. § 626(f) (OWBPA 21/45-Day Review & 7-Day Revocation Rule))
Can my employer hold back my final paycheck until I sign?
Not in California. Labor Code § 206.5 bars requiring a release of claims for wages due as a condition of paying them, and final pay deadlines apply regardless.
How long do I have to decide if I am over 40?
At least 21 days for an individual termination or 45 days for a group program, plus 7 days to revoke after signing, under the OWBPA.
Is severance required by law?
Generally no in the U.S., unless a contract, plan or a law such as WARN back-pay liability applies. Some countries, such as the UK and Hong Kong, do have statutory redundancy or severance pay.