Estimate employment settlement, severance pay, and offer value in months of pay from salary, service years, lost pay, and settlement factors.
Related Calculators
- Leave Pay Calculator
- Weighted Overtime Calculator
- Tenure Calculator
- Compound Salary Increase Calculator
- All Personal Finance Calculators
Employment Settlement Formula
The calculator uses a different formula for each selected mode. These are gross USD arithmetic scenarios, not estimates of legal entitlement.
Lost-pay scenario mode (lost-pay model):
Offer-to-months mode:
Severance scenario mode:
- Weekly Pay = annualized pay ÷ 52
- Monthly Pay = annualized pay ÷ 12
- Lost Weeks = time without comparable pay (months are converted at 52/12 weeks per month, consistent with annual pay divided by 52)
- Factor = 0.75x to 2.0x of net lost pay, chosen as an illustrative scenario; these factors do not assess case strength
- Other Damages = other amounts you intend to add, without double counting; the calculator does not determine recoverability
- 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 lost-pay mode shows an arbitrary ±25% sensitivity band around the scenario amount. It is not a predicted settlement range or confidence interval.
Reference Tables
These tables illustrate arithmetic ratios only. They do not establish legal standards, typical outcomes, or offer quality.
| Illustrative Scenario | Factor | Arithmetic Meaning |
|---|---|---|
| 0.75× example | 0.75x | 75% of supplied net lost pay, plus other amounts |
| 1× example | 1.0x | 100% of supplied net lost pay, plus other amounts |
| 1.5× example | 1.5x | 150% of supplied net lost pay, plus other amounts |
| 2× example | 2.0x | 200% of supplied net lost pay, plus other amounts |
| Offer Size | Pay Equivalent Only |
|---|---|
| Less than 1 month of pay | Below one month of gross pay; no quality assessment |
| 1 to 3 months | One to three months of gross pay; no quality assessment |
| 3 to 6 months | Three to six months of gross pay; no liability assessment |
| 6 to 12 months | Six to twelve months of gross pay; no damages assessment |
| More than 12 months | More than twelve months of gross pay; no legal inference |
Example and FAQ
Example. You earned $78,000 per year and went 5 months without comparable pay. Using an illustrative 1.0x factor and $2,500 in other added amounts, with no replacement earnings:
- Weekly pay: $78,000 ÷ 52 = $1,500
- Lost weeks: 5 × (52/12) = 21.6667
- Lost pay: $1,500 × (65/3) = $32,500
- Scenario: $32,500 + $2,500 = $35,000
- Illustrative band (±25%): $26,250 to $43,750
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 scenario for a proposed separation formula and the lost-pay scenario for illustrative arithmetic. Do not add them unless both are actually on the table.
Why does the result show a range? The ±25% band is an arbitrary sensitivity scenario. It does not describe how a claim is likely to resolve; actual amounts depend on evidence, remedies, applicable law, and the agreement.
What about mitigation? For this simplified model, enter the original pay rate and lost-pay period, then enter replacement earnings for that period in Adjustments. The calculator subtracts that amount before applying the illustrative factor. Legal mitigation rules require case-specific advice.
