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The Average Severance Pay

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When cutting ties between an employer and a worker, the end of the relationship is often met with a severance package to ease a worker's transition to something new. Severance is usually calculated based on the number of weeks served with the company. Understanding what the average severance pay is can help you know what to expect and how to negotiate a better deal for yourself.

Severance Components

Cash payments are not the only components of the average severance package and in some cases, the other benefits you receive can amount to more than your final check. Severance packages may include any number of benefits depending on the company, industry and employee's position. For example, some may have cash, healthcare and job search assistance components while others may provide workers with office equipment, stock options and life insurance coverage. Still others may grant the former employee two weeks of pay and a letter of recommendation. The details of any package vary according to company policy and your own bargaining power.

Getting Severance Pay

Severance packages are most often offered when you accept a job offer. They are considered part of your compensation package and any inclusions should be discussed before you sign on with a new company. Companies are not obligated to give you any severance at all unless it is part of your employment contract although some may choose to extend the courtesy to long-term workers or those with high rank in the company. However the average employee works without a contract and will receive nothing at all at her time of dismissal.

Average Severance Pay

In most cases companies base the number of weeks severance pay you get on the number of years you have been an employee. The standard formula is two weeks of severance per year of work although it can vary according to company policy. In general, the average maximum number of weeks is 26 for a non-executive and between 6-and-12 months for an executive. As a general rule, larger companies tend to offer larger severance packages and employees with higher standing in the company tend to be given more of a sendoff.

Angling for More

Companies are free to offer workers severance at the time of a layoff, retirement, or release as a result of a company restructuring, even if they did not negotiate one when hired. In return they may ask the worker to sign a confidentiality or non-competition contract that restricts her actions once she's left. If this is the case, the average severance guidelines are out the window. Depending on her time with the company and her knowledge of its inner workings, she may be able to negotiate something more substantial for herself before signing the release and promising to restrict her actions.


Robert Morello has an extensive travel, marketing and business background. He graduated with a Bachelor of Arts from Columbia University in 2002 and has worked in travel as a guide, corporate senior marketing and product manager and travel consultant/expert. Morello is a professional writer and adjunct professor of travel and tourism.

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