Enter the employee’s annual salary, number of years worked, and the buyout rate into the calculator to determine the buyout amount. This calculator can also evaluate any of the variables given the others are known.
- All Business Calculators
- Tenant Buyout Calculator
- Buyout Price Calculator
- Write Off Value Calculator
Employee Buyout Formula
The following formula is used to calculate the employee buyout amount.
BO = (S * Y * R) / 100
Variables:
- BO is the buyout amount ($)
- S is the employee’s annual salary ($)
- Y is the number of years the employee has worked
- R is the buyout rate (%)
To calculate the employee buyout amount, multiply the employee’s annual salary by the number of years the employee has worked. Then multiply the result by the buyout rate. Finally, divide the result by 100 to get the buyout amount.
What is an Employee Buyout?
In the context of this calculator, an employee buyout is a voluntary separation or severance buyout package—an offer from an employer to pay an employee a lump sum (and sometimes additional benefits) in exchange for the employee voluntarily resigning or retiring. The amount is often tied to pay and length of service (for example, a certain percentage of annual salary for each year worked), but real-world buyout terms vary by employer and may have tax and legal considerations.
