Final Paycheck Calculator
Estimate final wages and timing obligations
Explore tool ->Reviewed by TheLegalCalc Editorial Team | Last updated: April 2026
Sources: U.S. Department of Labor | IRS | State Bar Associations
Estimate severance based on weekly pay and years of service. This Severance Pay estimate is tailored for Arizona.
Content last reviewed: April 2026
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Severance in the United States is usually a contract-and-policy issue, not an automatic statutory entitlement. As a starting point, federal law generally does not require private employers to pay severance solely because employment ends. The practical right to severance typically comes from one of four sources: an individual employment agreement, a formal severance plan, an offer letter or handbook policy, or a collective bargaining agreement. That legal distinction matters because the enforcement path changes depending on whether the promise is contractual, wage-like under state law, or part of a potentially ERISA-governed plan.\n\nThis calculator estimates gross severance by applying a service-based formula to weekly pay, then applying a cap. The baseline logic mirrors common market frameworks such as one week per year of service, with some employers paying more for management roles or long-tenure employees. In this tool, state defaults adjust the weeks-per-year assumption and cap behavior to reflect jurisdiction-sensitive risk screening. Example: if weekly pay is $1,800, years of service are 6, and the plan assumption is 1.5 weeks per year, the preliminary severance weeks are 9.0. Gross severance estimate = 9.0 x $1,800 = $16,200 (before taxes, offsets, and release conditions).\n\nIn real disputes, the final amount can differ materially from this estimate. First, many plans condition payment on signing a release of claims, and waiver enforceability can be stricter for workers age 40+ under the Older Workers Benefit Protection Act. Second, if the severance arrangement is tied to an ongoing employee benefit plan, ERISA procedures may require internal claim/appeal steps before litigation. Third, states differ on whether promised severance is treated like wages once earned, which can affect timing and penalties for nonpayment. Fourth, tax treatment is usually payroll-wage treatment under IRS rules, so withholding and net cash can be significantly lower than gross estimate. Finally, employers often offset severance by WARN payments, bonus prorations, or other contractual provisions. Use this estimate as a negotiation and planning baseline, then verify your rights against the exact written plan and current federal/state law.
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