Severance: How much can you expect?

Laid off? Here’s how much severance you can expect

Years of service, age, position, industry and level of compensation all factor into a severance package

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job_loss_484So you’ve come into work to find out it’s your last day. Years of service, age, position, industry and level of compensation all factor into a severance package, says Michael Wright, an employment lawyer with Cavalluzzo. But unless terms are spelled out in an offer letter or written employment agreement there’s no set rule to determine a payout, he warns. As these purely illustrative examples show, packages vary. Seek legal advice if you ever find yourself in this position.

      Play: Mark Brown talks severance pay with 680 News’ Mike Eppel

See which of the below scenarios most applies to you.

Name: Young and Employable

Age: 27

Position: Entry-level

Salary: $45,000 (plus 50% off company services)

Possible severance: Three months or $11,250 (plus continuation of 50% discount for that period)

Employers might push for two months, but it’s tough to land a job in eight weeks. Don’t expect much more than that. Someone at this age and experience should have an easier time finding an equivalent job and pay than someone in a more senior role with more experience.

Name: Mid-Life Crisis

Age: 45

Position: Junior manager

Salary: $88,000

Possible severance: 12 months or $88,000 (plus benefits and bonuses)

At age 45 most workers are still very marketable, but it could take time to find equivalent employment at a similar income level. It ’s worth noting, though, that someone who has worked a few years more or a few years less might b e entitled to the same severance. That’s key. You don’t just multiply years to come up with a severance payout.

Name: Not Ready to Retire

Age: 64

Position: Manager

Salary: $120,000

Possible severance: 24 months or $240,000 (plus pension contributions)

Being laid off near retirement age doesn’t mean you can afford to retire, or even want to. A big payout is possible, provided the affected employee is diligently looking for new work. Collecting a pension shouldn’t affect severance either, as it is essentially a form of deferred wages.

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