Estimate employment settlement, severance pay, and offer value in months of pay from salary, service years, lost pay, and settlement factors.
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Employment Settlement Formula
The calculator uses a different formula for each tab.
Estimate tab (lost-pay model):
Settlement = (Weekly Pay × Lost Weeks × Factor) + Other Damages
Offer to months tab:
Months of Pay = Offer ÷ Monthly Pay
Severance pay tab:
Severance = Weekly Pay × Years of Service × Weeks per Year
- Weekly Pay = annualized pay ÷ 52
- Monthly Pay = annualized pay ÷ 12
- Lost Weeks = time without comparable pay (months are converted at 4.34524 weeks per month)
- Factor = 0.75x to 2.0x of lost pay, based on case strength
- Other Damages = added emotional distress, medical, or attorney fee amounts
- Years of Service = full years worked, including partial years as decimals
- Weeks per Year = 1, 2, 4, or a custom severance rule
These are planning estimates. Real settlements depend on liability strength, evidence, jurisdiction, employer size, mitigation efforts, and tax treatment. Hourly pay is annualized using average hours per week × 52. The midpoint range shown on the Estimate tab applies a ±25% band around the typical figure to reflect negotiation variance.
Reference Tables
Use these as ballpark anchors when reading your calculator result.
| Case Strength | Factor | Typical Use |
|---|---|---|
| Conservative | 0.75x | Weak documentation, short tenure, at-will dispute |
| Typical | 1.0x | Standard wrongful termination or wage claim |
| Strong | 1.5x | Documented retaliation or discrimination |
| Very strong | 2.0x | Clear liability, witness support, statutory damages |
| Offer Size | Common Read |
|---|---|
| Less than 1 month of pay | Low; often a nuisance-value or token offer |
| 1 to 3 months | Modest; standard release-for-pay separation |
| 3 to 6 months | Moderate; employer sees real legal exposure |
| 6 to 12 months | Substantial; documented claim with damages |
| More than 12 months | High; strong liability or executive-level case |
Example and FAQ
Example. You earned $78,000 per year and went 5 months without comparable pay. Using a typical 1.0x factor and $2,500 in attorney fees:
- Weekly pay: $78,000 ÷ 52 = $1,500
- Lost weeks: 5 × 4.34524 = 21.73
- Lost pay: $1,500 × 21.73 = $32,595
- Midpoint: $32,595 + $2,500 = $35,095
- Range (±25%): about $26,300 to $43,900
Are settlements taxable? Lost wages are generally taxed as ordinary income. Physical injury portions may be excluded. Attorney fees and emotional distress have separate rules. Confirm with a tax professional before signing.
Does this include severance and a lawsuit settlement together? No. Run the Severance tab for a separation package and the Estimate tab for a claim-based settlement. Do not add them unless both are actually on the table.
Why does the result show a range? Settlements move during negotiation. The ±25% band reflects how the same underlying claim can resolve higher or lower depending on timing, leverage, and risk tolerance.
What about mitigation? If you found a new job, lost pay is reduced by what you now earn. Subtract new earnings from your old pay before entering lost time.
