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How to Calculate Severance Payment

Updated March 22, 2017

Different companies and organisations offer different severance plans and payments in the event of termination. It is important to be able to calculate severance payments to know what exactly you are going to earn and have the ability to plan accordingly. Calculating severance payments is simple, but you will first need to know your hourly or annual wage. Once you know this, you can compute what you will receive per month in severance payments. You should also know how many months you will receive severance. This will depend on how long you have worked with the company and the company's specific severance policy.

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  1. Multiply your hourly wage by the amount of hours you work per week. For example, if you work 40 hours a week and make £13 an hour, you are making £520 a week.

  2. Multiply your weekly pay by 52 to determine how much you make in a year. If you already know your annual salary, you can skip this step. Using the example above, your annual salary would be £27,040.

  3. Divide your annual salary by 12 to determine what you earn per month. This will be your monthly severance payment. Using the example above, this would be £2,253.3 per month.

  4. Multiply your monthly severance payment amount by the total number of months you will be receiving severance if you want to figure out how much you will make in total from severance.

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About the Author

James Wiley graduated from Providence College in 2009 as a double major in global studies and Spanish. Wiley's capstone thesis paper was published in the Providence College database. He has also competed in international script-writing competitions and coauthored a pilot which placed in the top 15 percent of international entries over the past year.

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