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Pay & Leave Pay Administration

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 conditions of eligibility. (See Fact Sheet: Severance Pay for additional guidance.) This fact sheet provides a worksheet that can be used to calculate a severance pay estimate, an example of a severance pay calculation, and a table providing the age adjustment factors used in severance pay computations for employees more than 40 years old.

Basic Severance Pay Allowance

The basic severance pay allowance consists of—

  • 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.

Age Adjustment Allowance

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.

Rate of Basic Pay

“Rate of basic pay” means the rate of pay fixed by law or administrative action for the position held by the employee, including, as applicable, annual premium pay for standby duty, law enforcement availability pay, straight-time pay for regular overtime hours for firefighters, night differential for prevailing rate employees, locality payments, and special rate supplements. Rate of basic pay does not include additional pay of any other kind. (See the definition of “rate of basic pay” in 5 CFR 550.703.)

Note: The following worksheet is intended to allow an employee who is eligible for severance pay to calculate the approximate amount of severance pay he or she may receive. The actual calculation formula is somewhat more complicated and technical. The computation below presumes that the employee was full-time and has not previously received severance pay based on an earlier involuntary separation. The Office of Personnel Management is not responsible for the accuracy of the estimate that this worksheet may provide. Employees should contact their agency’s human resources office for information on their official severance pay entitlement.

Severance Pay Estimation Worksheet

STEPDESCRIPTION
Step 1 Annual Rate of Basic Pay (at time of separation) = _______________
Step 2

Weekly Rate (divide result of step 1 by 2,087 and then multiply by 40)

(___________ / 2,087) x 40 = ______________


(Note: This weekly rate can also be derived by dividing the annual rate by 52.175.)

Step 3 Years of Service (use step 3A or step 3B below, as appropriate)
A. If your length of service is less than 10 years, enter your length of service: __________. Continue to step 4.

B. If your length of service is more than 10 years:

(1) enter your length of service: __________

(2) subtract 10 from your length of service from line 1: ______ - 10 = __________

(3) multiply the result of line 2 by 2: ______ x 2 = __________

(4) add 10 to the result of line 3: ______ + 10 = __________

This is your adjusted years of service. Continue to step 4.

Step 4

Basic Severance Pay (multiply result of step 2 by the result of step 3A or 3B, as appropriate)

_________ x __________ = ___________

Step 5

Age Adjustment Factor (If your age is above 40, look up your age on the “Age Table and Factors” chart below. Enter the “factor” shown. If your age is below 40 years and 3 months, your “factor” is 1.)

Age = _______ years and _______ months

Factor = _______

Step 6

Adjusted Severance Pay (multiply the result of step 4 by the factor listed in step 5)

__________ x ____________ = _______________

Step 7

Multiply the result of step 2 by 52 weeks.

__________ x 52 = _______________


This is the maximum amount of severance pay payable under the 1-year (52 weeks) limit.

Step 8

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: ___________

This is the estimated amount of your total severance pay fund.

Step 9

Multiply the result of step 2 by 2.

___________ x 2 = _______________

This is the estimated amount of your biweekly severance payment (before deductions).

Step 10

Divide the result of step 8 by the result of step 9 and then multiply by 2.

(________ / _________) x 2 = _______________


This is the approximate number of weeks of severance payments you will receive (assuming you are not reemployed by the Government).

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Severance Pay Calculation Example

STEPDESCRIPTION
Step 1

Annual Rate of Basic Pay (at time of separation) = $73,619

Step 2

Weekly Rate (divide result of step 1 by 2,087 and then multiply by 40)

($73,619 / 2,087) x 40 = $1,411


(Note: This weekly rate can also be derived by dividing the annual rate by 52.175.)

Step 3

Years of Service (use step 3A or step 3B below, as appropriate)

A. If your length of service is less than 10 years, enter your length of service: __________. Continue to step 4.

B. If your length of service is more than 10 years:

(1) enter your length of service: 18

(2) subtract 10 from your length of service from line 1: 18 - 10 = 8

(3) multiply the result of line 2 by 2: 8 x 2 = 16

(4) add 10 to the result of line 3: 16 + 10 = 26

This is your adjusted years of service. Continue to step 4.

Step 4

Basic Severance Pay (multiply result of step 2 by the result of step 3A or 3B, as appropriate)

$1,411 x 26 = $36,686

Step 5

Age Adjustment Factor (If your age is above 40, look up your age on the “Age Table and Factors” chart below. Enter the “factor” shown. If your age is below 40 years and 3 months, your “factor” is 1.)

Age = 52 years and 0 months

Factor = 2.2

Step 6

Adjusted Severance Pay (multiply the result of step 4 by the factor listed in step 5)

$36,686 x 2.2 = $80,709.20

Step 7

Multiply the result of step 2 by 52 weeks.

$1,411 x 52 = $73,372


This is the maximum amount of severance pay payable under the 1-year (52 weeks) limit.

Step 8

If the result of step 6 exceeds the result of step 7, enter the result of step 7: $73,372

Otherwise, enter the result of step 6: ___________

This is the estimated amount of your total severance pay fund.

Step 9

Multiply the result of step 2 by 2.

$1,411 x 2 = $2,822

This is the estimated amount of your biweekly severance payment (before deductions).

Step 10

Divide the result of step 8 by the result of step 9 and then multiply by 2.

($73,372 / $2,822) x 2 = 52


This is the approximate number of weeks of severance payments you will receive (assuming you are not reemployed by the Government).

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Age Table and Factors
YearsMonthsFactorYearsMonthsFactorYearsMonthsFactor

40

3-5

1.025

48

6-8

1.850

56

9-11

2.675

40

6-8

1.050

48

9-11

1.875

57

0-2

2.700

40

9-11

1.075

49

0-2

1.900

57

3-5

2.725

41

0-2

1.100

49

3-5

1.925

57

6-8

2.750

41

3-5

1.125

49

6-8

1.950

57

9-11

2.775

41

6-8

1.150

49

9-11

1.975

58

0-2

2.800

41

9-11

1.175

50

0-2

2.000

58

3-5

2.825

42

0-2

1.200

50

3-5

2.025

58

6-8

2.850

42

3-5

1.225

50

6-8

2.050

58

9-11

2.875

42

6-8

1.250

50

9-11

2.075

59

0-2

2.900

42

9-11

1.275

51

0-2

2.100

59

3-5

2.925

43

0-2

1.300

51

3-5

2.125

59

6-8

2.950

43

3-5

1.325

51

6-8

2.150

59

9-11

2.975

43

6-8

1.350

51

9-11

2.175

60

0-2

3.000

43

9-11

1.375

52

0-2

2.200

60

3-5

3.025

44

0-2

1.400

52

3-5

2.225

60

6-8

3.050

44

3-5

1.425

52

6-8

2.250

60

9-11

3.075

44

6-8

1.450

52

9-11

2.275

61

0-2

3.100

44

9-11

1.475

53

0-2

2.300

61

3-5

3.125

45

0-2

1.500

53

3-5

2.325

61

6-8

3.150

45

3-5

1.525

53

6-8

2.350

61

9-11

3.175

45

6-8

1.550

53

9-11

2.375

62

0-2

3.200

45

9-11

1.575

54

0-2

2.400

62

3-5

3.225

46

0-2

1.600

54

3-5

2.425

62

6-8

3.250

46

3-5

1.625

54

6-8

2.450

62

9-11

3.275

46

6-8

1.650

54

9-11

2.475

63

0-2

3.300

46

9-11

1.675

55

0-2

2.50

63

3-5

3.325

47

0-2

1.700

55

3-5

2.525

63

6-8

3.350

47

3-5

1.725

55

6-8

2.550

63

9-11

3.375

47

6-8

1.750

55

9-11

2.575

64

0-2

3.400

47

9-11

1.775

56

0-2

2.600

64

3-5

3.425

48

0-2

1.800

56

3-5

2.625

64

6-8

3.450

48

3-5

1.825

56

6-8

2.650

64

9-11

3.475

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