The severance calculator provides the user with an estimate of an employee's severance benefits using the employee's salary, length of service, and other characteristics. It is based on current law and policies in effect. Rules that apply to the calculations
are listed below.
An employee's actual eligibility for severance benefits, and the amount of those benefits are determined by the employee's agency human resource office.
Rules That Apply:
- In order for the calculations to be most accurate, the Employee's Annual Salary should exclude Temporary Pay. It should include on-going special rates (such as for working a late shift), but not special rates for acting or temporary assignments. Of
course, the user can get a rough estimate of severance benefits by using a rounded salary amount ($25,000, for example).
- Severance Pay is calculated by rounding up the employee's years of completed, continuous service to the next higher year. If the layoff occurs on the employee's service anniversary date, the calculator may overstate the employee's severance pay.
- The employee's severance pay is calculated as indicated below. The table takes into account the rounding up of years of service, so the user should enter completed years, and not round the number of years up.
Years of Continuous, Completed Service
Weeks of Severance Pay
0 or 1
17 or More
- The employee must be full-time, 50 years old or older, and vested in the retirement system in order to be eligible to convert severance benefits to a retirement credit. If the employee is younger than 55 after the credit is added, he or she must have
a minimum of 10 years of total creditable service to qualify for the 50/10 reduced retirement option.
- The retirement credit option is estimated by first adding the employee's severance pay, health insurance premium for one year, and life insurance premium for one year. Then, the result is divided by 15% of the employee's salary and the answer is rounded
up to the next whole number.
- The life insurance premium for FY17 and FY18 is 1.31% of the employee's salary.
- The employee's health insurance premium varies according to the employee's plan and coverage.
- There are limitations on the number of annual leave hours that an employee may be paid. There are also conditions that an employee must meet in order to qualify for payment of sick leave hours or VSDP disability credits and a limitation on the number
of those hours that may be paid. The user should refer to the appropriate policies for an explanation of these conditions and limitations.
- Employees who are laid off also may be eligible for unemployment compensation benefits. They are not considered in this calculator.
- Employees who are laid off and who have Disability Credits may elect to convert those credits to retirement credit. This option is not considered in this calculator.
Severance Benefits Calculator - FY21
Severance Benefits Calculator FY21 - Effective July 1, 2020