Severance Pay Estimation Worksheet
Fact Sheet: Severance Pay Estimation Worksheet
Description
Severance pay is authorized under 5 U.S.C. 5595 and 5 CFR part 550, subpart G, for full-time and part-time employees who are involuntarily separated from Federal service and who meet other eligibility conditions. This fact sheet provides:
- Basic explanations of an employee’s human resources information used in computing his or her severance pay;
- An Example Severance Pay Estimation Worksheet
- A Blank Severance Pay Estimation Worksheet
- Notes regarding the two worksheets
- An Age Adjustment Factors Table for employees older than 40 years of age
- Helpful links
For additional guidance, see OPM’s fact sheet on Severance Pay.
Crediting Years and Months of Service for the Basic Severance Pay Allowance
The basic severance pay allowance is computed as follows —
- One week of pay at the rate of basic pay for the position held by the employee at the time of separation for each full year of creditable service through 10 years;
- Two weeks of pay at the rate of basic pay for the position held by the employee at the time of separation for each full year of creditable service beyond 10 years; and
- Twenty-five percent of the otherwise applicable amount for each full 3 months of creditable service beyond the final full year (where the otherwise applicable amount is 1 week’s basic pay if total service is less than 10 years and 2 weeks’ basic pay if total service is more than 10 years).
The weekly rate of basic pay for employees with variable work schedules is determined based on the weekly average for the last position held by the employee during the 26 biweekly pay periods immediately preceding the involuntary separation. The regulations at 5 CFR 550.707(b) provide specific instructions on calculating the weekly rate for various types of variable work schedules, including seasonal work schedules.
Age Adjustment Allowance for Employees Older than 40
The basic severance pay allowance is augmented by an age adjustment allowance consisting of 2.5 percent of the basic severance pay allowance for each full 3 months of age over 40 years. (See the Age Adjustment Factors Table below.)
Rate of Basic Pay for Severance Pay Purposes
Rate of basic pay means the base rate of pay fixed by law or administrative action for the position held by the employee, plus the following types of additional pay, as applicable:
- Any locality payment under 5 CFR part 531, subpart F, or similar payment under other legal authority;
- Special rate supplement under 5 CFR part 530, subpart C, or similar payment or supplement under other legal authority;
- Standby duty premium pay under 5 U.S.C. 5545(c)(1);
- Administratively uncontrollable overtime pay under 5 U.S.C. 5545(c)(2);
- Law enforcement availability pay under 5 U.S.C. 5545a;
- Straight-time pay for regular overtime hours for firefighters under 5 U.S.C. 5545b (as provided in 5 CFR 550.1305(b));
- Night differential for prevailing rate employees under 5 U.S.C. 5343(f); and
- An overtime supplement for regularly scheduled overtime within a Border Patrol Agent’s regular tour of duty under 5 U.S.C. 5550 (as required by 5 U.S.C. 5550(d)(1)(A)).
Rate of basic pay does not include additional pay of any other kind. (See definition of rate of basic pay in 5 CFR 550.703.)
Notes Regarding the Example and Blank Severance Pay Estimation Worksheets
- The estimation worksheets below are intended to allow an employee who is eligible for severance pay to calculate the approximate amount of severance pay he or she may receive based on simplified assumptions. The actual calculation formula is somewhat more complicated and technical.
- The estimation worksheets presume that the employee (1) is full-time with a regular 40-hour weekly or 80-hour biweekly work schedule, (2) has not previously received severance pay based on an earlier involuntary separation, and (3) is not receiving additional pay that is treated as creditable basic pay for severance pay purposes.
- Employees should contact their agency’s human resources office for information on their severance pay eligibility and the official amount to be paid.
Example Severance Pay Estimation Worksheet
This sample uses the same information and provides a more detailed computation of the example presented in the Severance Pay fact sheet.
For this example, at the time of separation, the employee —
- Has an annual rate of basic pay of $78,262;
- Has creditable service of 20 years and 4 months; and
- Is 45 years and 8 months old.
Example Step 1. Annual Rate of Basic Pay
Annual Rate of Basic Pay (at time of separation) = $78,262
Example Step 2. Weekly Rate
Divide result of Step 1 by 2,087 (rounding to nearest cent) and then multiply by 40:
$78,262 ÷ 2,087 = $37.50
$37.50 × 40 = $1,500.00
Note: For an employee who has an alternative work schedule with an 80-hour basic work requirement in a biweekly pay period, the employee is deemed to have a 40-hour workweek for the purpose of computing the weekly rate for severance pay purposes.
Example Step 3. Years and Months of Service
Use Step 3A or Step 3B below, depending on whether you have less than or more than 10 years of service. For information on service that is creditable for severance pay purposes, see the Severance Pay fact sheet.
Step 3A: If your length of service is no more than 10 years:
[Note: In this example, Step 3A is not completed since the employee has more than 10 years of service.]
(i) Enter the number of fully completed years and completed months of service for a partial year:
Years: Months:
(ii) Divide the number of completed months of service by 3 (where 3 is the number of months in a quarter-year) and then round down to the nearest whole number:
÷ 3 = and rounded down to the nearest whole number = (This is the number of full 3-month increments of service for the partial year.)
(iii) Multiply the result of line (ii) by 25 percent:
× 25% = (expressed as a decimal)
(This is the value of the full 3-month increments expressed in years. If there are 0 increments, the value is 0 years. 1 increment equals 0.25 years. 2 increments equal 0.5 years. 3 increments equal 0.75 years.)
(iv) Add the number of fully completed years of service from line (i) with the result of line (iii):
+ = (This is the adjusted number of years of service.)
(v) Continue to Step 4.
Step 3B: If your length of service is more than 10 years:
(i) Enter the number of fully completed years and completed months of service for a partial year:
Years: 20 Months: 4
(ii) Subtract 10 from the total number of fully completed years of service from line (i):
20 − 10 = 10
(iii) Multiply the result of line (ii) by 2 (years beyond 10 are given a double value):
10 × 2 = 20
(iv) Add 10 to the result of line (iii):
10 + 20 = 30 (This is your adjusted full years of service.)
(v) Divide the number of completed months of service from line (i) by 3 (where 3 is the number of months in a quarter year) and then round down to the nearest whole number:
4 ÷ 3 = 1.333 and rounded down to the nearest whole number = 1 (This is the number of full 3-month (quarter-year) increments of service for the partial year.)
(vi) Multiply the result of line (v) by 25 percent and multiply by 2 (months beyond 10 years are given a double value):
( 1 × 2) × 25% = 0.5 (expressed as a decimal)
(This is the value of the full 3-month increments expressed in years after multiplying the number of increments by 2. If there are 0 increments, the value is 0 years. 1 increment multiplied by 2 yields 0.5 years. 2 increments multiplied by 2 yields 1 year. 3 increments multiplied by 2 yields 1.5 years.)
(vii) Add the results of lines (iv) and (vi):
30 + 0.5 = 30.5 (This is your adjusted number of years of service.)
(viii) Continue to Step 4.
Example Step 4. Basic Severance Pay Allowance
Multiply the result of Step 2 by the result on lines Step 3A(iv) or 3B(vii), as appropriate:
( $1,500 × 30.5 ) = $45,750.00 (This is your basic severance pay allowance.)
Example Step 5. Age Adjustment Factor
If your age is more than 40 years, find your age and factor on the Age Adjustment Factors Table below. Enter the factor shown. If your age is less than 40 years, your factor is 1.
Age = 45 full years and 8 full months
Factor = 1.550
Example Step 6. Adjusted Severance Pay
Multiply the result of Step 4 by the factor listed in Step 5:
$45,750.00 × 1.550 = $70,912.50 (This is your age-adjusted severance pay allowance based on your age over 40.)
Example Step 7. Maximum Amount of Severance Pay
Multiply the result of Step 2 by 52 weeks (This example assumes no weeks of severance pay have been paid in the past.):
$1,500.00 × 52 = $78,000.00 (This is the maximum amount of severance pay payable under the 1-year [52 weeks] limit.)
Example Step 8. Estimated Total Severance Pay Fund
If the result of Step 6 exceeds the result of Step 7, enter the result of Step 7: $
Otherwise, enter the result of Step 6: $70,912.50
(Either dollar amount is your estimated total severance pay fund that will be paid by your agency over a period of time. See Steps 9 and 10 for more information.)
Example Step 9. Biweekly Severance Pay
Multiply the result of Step 2 by 2:
$1,500.00 × 2 = $3,000.00 (This is the estimated amount of your biweekly severance payment [gross before deductions] that you will be paid until your total severance pay fund [the amount in Step 8] is exhausted, or you become reemployed by the Government of the United States or the Government of the District of Columbia, and it is terminated or suspended. See the “Reemployment and Termination or Suspension of Severance Pay” section of the Severance Pay fact sheet.)
Example Step 10. Number of Weeks of Severance Pay
Divide the result of Step 8 by the result of Step 9 and then multiply by 2:
( $70,912.50 ÷ $3,000.00 ) × 2 = 47.275 weeks (This is the approximate number of weeks of severance payments you will receive [assuming you are not reemployed by the Federal Government or the District of Columbia prior to exhausting your severance pay fund].)
Blank Severance Pay Estimation Worksheet
Step 1. Annual Rate of Basic Pay
Annual Rate of Basic Pay (at time of separation) = $
Step 2. Weekly Rate
Divide result of Step 1 by 2,087 (rounding to nearest cent) and then multiply by 40:
$ ÷ 2,087 = $
$ × 40 = $
Note: For an employee who has an alternative work schedule with an 80-hour basic work requirement in a biweekly pay period, the employee is deemed to have a 40-hour workweek for the purpose of computing the weekly rate for severance pay purposes.
Step 3. Years and Months of Service
Use Step 3A or Step 3B below, depending on whether you have less than or more than 10 years of service. For information on service that is creditable for severance pay purposes, see the Severance Pay fact sheet.
Step 3A: If your length of service is no more than 10 years:
(i) Enter the number of fully completed years and completed months of service for a partial year:
Years: Months:
(ii) Divide the number of completed months of service by 3 (where 3 is the number of months in a quarter-year) and then round down to the nearest whole number:
÷ 3 = and rounded down to the nearest whole number = (This is the number of full 3-month (quarter-year) increments of service for the partial year.)
(iii) Multiply the result of line (ii) by 25 percent:
× 25% = (expressed as a decimal)
(This is the value of the full 3-month increments expressed in years. If there are 0 increments, the value is 0 years. 1 increment equals 0.25 years. 2 increments equal 0.5 years. 3 increments equal 0.75 years.)
(iv) Add the number of fully completed years of service from line (i) with the result of line (iii):
+ = (This is the adjusted number of years of service.)
(v) Continue to Step 4.
Step 3B: If your length of service is more than 10 years:
(i) Enter the number of fully completed years and completed months of service for a partial year:
Years: Months:
(ii) Subtract 10 from the total number of fully completed years of service from line (i):
− 10 =
(iii) Multiply the result of line (ii) by 2 (years beyond 10 are given a double value):
× 2 =
(iv) Add 10 to the result of line (iii):
10 + = (This is your adjusted full years of service.)
(v) Divide the number of completed months of service from line (i) by 3 (where 3 is the number of months in a quarter year) and then round down to the nearest whole number:
÷ 3 = and rounded down to the nearest whole number =
(This is the number of full 3-month (quarter-year) increments of service for the partial year.)
(vi) Multiply the result of line (v) by 25 percent and multiply by 2 (months beyond 10 years are given a double value):
( × 2) × 25% = (expressed as a decimal)
(This is the value of the full 3-month increments expressed in years after multiplying the number of increments by 2. If there are 0 increments, the value is 0 years. 1 increment multiplied by 2 yields .5 years. 2 increments multiplied by 2 yields 1 year. 3 increments multiplied by 2 yields 1.5 years.)
(vii) Add the results of lines (iv) and (vi):
+ = (This is your adjusted number of years of service.)
(viii) Continue to Step 4.
Step 4. Basic Severance Pay Allowance
Multiply the result of Step 2 by the result on lines Step 3A(iv) or 3B(vii), as appropriate:
$ × = $ (This is your basic severance pay allowance.)
Step 5. Age Adjustment Factor
If your age is more than 40 years, find your age and factor on the Age Adjustment Factors Table below. Enter the factor shown. If your age is less than 40 years, your factor is 1.
Age = full years and full months
Factor =
Step 6. Adjusted Severance Pay
Multiply the result of Step 4 by the factor listed in Step 5:
$ × = $ (This is your age-adjusted severance pay allowance based on your age over 40.)
Step 7. Maximum Amount of Severance Pay
Multiply the result of Step 2 by 52 weeks (This estimation worksheet assumes no weeks of severance pay have been paid in the past.):
× 52 = (This is the maximum amount of severance pay payable under the 1-year [52 weeks] limit.)
Step 8. Estimated Total Severance Pay Fund
If the result of Step 6 exceeds the result of Step 7, enter the result of Step 7: $
Otherwise, enter the result of Step 6: $
(Either dollar amount is your total severance pay fund that will be paid by your agency over a period of time. See Steps 9 and 10 for more information.)
Step 9. Biweekly Severance Pay
Multiply the result of Step 2 by 2:
$ × 2 = $ (This is the estimated amount of your biweekly severance payment [gross before deductions] that you will be paid until your total severance pay fund [the amount in Step 8] is exhausted, or you become reemployed by the Government of the United States or the Government of the District of Columbia, and it is terminated or suspended. See the “Reemployment and Termination or Suspension of Severance Pay” section of the Severance Pay fact sheet.)
Step 10. Number of Weeks of Severance Pay
Divide the result of Step 8 by the result of Step 9 and then multiply by 2:
($ ÷ $ ) × 2 = weeks (This is the approximate number of weeks of severance payments you will receive [assuming you are not reemployed by the Federal Government or the District of Columbia prior to exhausting your severance pay fund].)
Age Adjustment Factors Table
This table is used for Step 5 of the estimation worksheets to determine the age adjustment factor for employees who are more than 40 years of age.
Return to:
- The fact sheet text information
- Step 5 of the Example Severance Pay Estimation Worksheet
- Step 5 of the Blank Severance Pay Estimation Worksheet
| Full Year of Age | 0 to 2 Full Months of Age Factor | 3 to 5 Full Months of Age Factor | 6 to 8 Full Months of Age Factor | 9 to 11 Full Months of Age Factor |
| 40 | 1.000 | 1.025 | 1.050 | 1.075 |
| 41 | 1.100 | 1.125 | 1.150 | 1.175 |
| 42 | 1.200 | 1.225 | 1.250 | 1.275 |
| 43 | 1.300 | 1.325 | 1.350 | 1.375 |
| 44 | 1.400 | 1.425 | 1.450 | 1.475 |
| 45 | 1.500 | 1.525 | 1.550 | 1.575 |
| 46 | 1.600 | 1.625 | 1.650 | 1.675 |
| 47 | 1.700 | 1.725 | 1.750 | 1.775 |
| 48 | 1.800 | 1.825 | 1.850 | 1.875 |
| 49 | 1.900 | 1.925 | 1.950 | 1.975 |
| 50 | 2.000 | 2.025 | 2.050 | 2.075 |
| 51 | 2.100 | 2.125 | 2.150 | 2.175 |
| 52 | 2.200 | 2.225 | 2.250 | 2.275 |
| 53 | 2.300 | 2.325 | 2.350 | 2.375 |
| 54 | 2.400 | 2.425 | 2.450 | 2.475 |
| 55 | 2.500 | 2.525 | 2.550 | 2.575 |
| 56 | 2.600 | 2.625 | 2.650 | 2.675 |
| 57 | 2.700 | 2.725 | 2.750 | 2.775 |
| 58 | 2.800 | 2.825 | 2.850 | 2.875 |
| 59 | 2.900 | 2.925 | 2.950 | 2.975 |
| 60 | 3.000 | 3.025 | 3.050 | 3.075 |
| 61 | 3.100 | 3.125 | 3.150 | 3.175 |
| 62 | 3.200 | 3.225 | 3.250 | 3.275 |
| 63 | 3.300 | 3.325 | 3.350 | 3.375 |
| 64 | 3.400 | 3.425 | 3.450 | 3.475 |
| 65 | 3.500 | 3.525 | 3.550 | 3.575 |
| 66 | 3.600 | 3.625 | 3.650 | 3.675 |
| 67 | 3.700 | 3.725 | 3.750 | 3.775 |
| 68 | 3.800 | 3.825 | 3.850 | 3.875 |
| 69 | 3.900 | 3.925 | 3.950 | 3.975 |
| 70 | 4.000 | 4.025 | 4.050 | 4.075 |
Note: To determine the age adjustment factor for employees who are 71 years of age and older, extend the applicable column for the full months of age factor by adding 0.10 for each completed yearly birthday—meaning for each additional year, each table cell is 0.10 more than the cell directly above it. Also, each decade birthday starts a new whole number.
Return to:
- The fact sheet text information
- Step 5 of the Example Severance Pay Estimation Worksheet
- Step 5 of the Blank Severance Pay Estimation Worksheet
Where to Get Answers to Severance Pay Questions
Agencies are responsible for the administration of severance pay for their employees and establishing their own HR policies based on regulations and statutes. Therefore, if you are an employee, timekeeper, supervisor or other agency official, or union representative, you should contact your servicing HR office for assistance with any questions you may have. If you are a component HR office, you should contact your agency headquarters office for assistance. If your HR chain of command needs assistance answering your question, inquiries should be directed to OPM through the headquarters HR policy office.
Helpful Links
- 5 U.S.C. 5595
- 5 CFR part 550, subpart G
- Severance Pay Fact Sheet
- Reductions in Force
- Lump-Sum Payments for Annual Leave