This calculator helps Federal Employees estimate their potential lump-sum severance payment, based on years of creditable service and age, adhering to the 52-week payment cap.
Federal Employee Severance Pay Calculator
Estimated Severance Pay:
$0.00
Detailed Calculation Steps
federal employee severance pay calculator Formula:
SM_Service = (Min(Service, 10) * 1 Week) + (Max(0, Service – 10) * 2 Weeks)
AM_Age = Max(0, Age – 40) * 0.1 Week
TSM = SM_Service + AM_Age
GSP = TSM * WBP
MaxSP = (52 Weeks – Prior Severance Weeks) * WBP
FSP = Min(GSP, MaxSP)
Formula Sources: U.S. OPM Severance Pay Fact Sheet, 5 U.S. Code ยง 5595
Variables:
- Basic Annual Pay ($): The employee’s rate of basic pay at the time of separation, excluding bonuses, overtime, or premium pay.
- Years of Creditable Service: The total years of Federal service that count toward the severance pay calculation, often including military service.
- Employee Age (Years): The employee’s age, where those over 40 receive an additional multiplier.
- Weeks of Prior Severance Pay: Any previous weeks of severance pay received from the Federal Government. This is subtracted from the 52-week maximum.
Related Calculators:
FERS Retirement Estimate | GS Salary Adjustment | TSP Contribution Limit | Annual Leave Buyout Value
What is federal employee severance pay calculator?
Federal Employee Severance Pay is a benefit provided to eligible employees who are involuntarily separated from Federal service, primarily during reductions-in-force (RIFs). It is intended to provide a financial cushion while the separated employee seeks new employment. Eligibility is generally restricted to employees with at least 12 months of continuous service who are separated through no fault of their own.
The calculation is unique because it compounds a service-based multiplier with an age-based multiplier. Unlike private sector severance, the total payment is legally capped at one year (52 weeks) of pay. This calculator provides an estimate of the total amount before taxes and other deductions are applied.
It is crucial to note that acceptance of severance pay may disqualify an employee from receiving certain government benefits (like unemployment compensation) or re-employment under certain circumstances for the duration of the severance period. Always consult with a human resources specialist for specific eligibility questions.
How to Calculate federal employee severance pay calculator (Example):
- Determine Weekly Pay: A 48-year-old employee with $104,000 Basic Annual Pay has a Weekly Basic Pay (WBP) of $104,000 / 52 = $2,000.
- Calculate Service Multiplier: The employee has 15 years of service.
- First 10 years: $10 \times 1 = 10$ weeks.
- Remaining 5 years: $5 \times 2 = 10$ weeks.
- Total Service Multiplier: $10 + 10 = 20$ weeks.
- Calculate Age Multiplier: The employee is 48, which is 8 years over 40.
- Age Multiplier: $8 \times 0.1 = 0.8$ weeks.
- Calculate Gross Multiplier and Pay: Total Multiplier is $20 + 0.8 = 20.8$ weeks. Gross Severance Pay is $20.8 \times \$2,000 = \$41,600$.
- Apply the Cap: Assuming 0 weeks of prior severance, the maximum is 52 weeks of pay, or $52 \times \$2,000 = \$104,000$. Since $\$41,600$ is less than $\$104,000$, the final severance pay is $\mathbf{\$41,600}$.
Frequently Asked Questions (FAQ):
Is severance pay taxed?
Yes, Federal Employee Severance Pay is considered ordinary income and is fully subject to Federal, state, and local income taxes, as well as Social Security (FICA) and Medicare taxes.
How long does severance pay last?
Severance pay continues until the total amount of the employee’s calculated entitlement is exhausted, or until the employee accepts an appointment with the Federal Government. It cannot exceed 52 weeks of pay.
What is the difference between Basic Annual Pay and Total Salary?
Basic Annual Pay is the rate of pay exclusive of premium pay, overtime, and bonuses. For the severance calculation, only this basic pay rate is used, not total compensation.
Do I lose severance if I get a non-Federal job?
No. Accepting a job outside the Federal Government does not affect your entitlement to the calculated severance pay amount. Severance pay stops only upon re-employment with the Federal Government.