Estimate a gratuity or severance payout from your salary, years of service, and the schedule in your employer policy or separation agreement.
| Scenario | Years of Service | Gratuity / Severance | Weekly Pay Equivalent |
|---|---|---|---|
| $60,000 / 5 yr / 1 week per year (2%) | 5.0 | $6,000 | 5.2 weeks |
| $85,000 / 8 yr 6 mo / 4% schedule | 8.5 | $28,900 | 17.7 weeks |
| $120,000 / 12 yr / 1 month per year (8.3%) | 12.0 | $119,520 | 51.8 weeks |
| $45,000 / 3 yr / 1 week per year (2%) | 3.0 | $2,700 | 3.1 weeks |
Every row uses the same schedule the calculator applies: Gratuity = Annual Salary × Schedule% × Years of Service, where the schedule percentage is what one week of pay per year works out to (2%). US gratuity is voluntary in most states, so this is an estimate of what an employer’s written policy would pay.
| Policy wording | % of annual salary per year |
|---|---|
| 1 week of pay per year of service | 2% |
| 2 weeks of pay per year of service | 4% |
| 1 month of pay per year of service | 8.3% |
| 2 months of pay per year of service | 16.7% |
The United States has no statutory gratuity. The Worker Adjustment and Retraining Notification (WARN) Act guarantees notice — 60 days for a plant closing or mass layoff at covered employers — not severance pay. Outside WARN, severance is whatever the employment contract, employee handbook or negotiated separation agreement provides. Some states (notably New Jersey for certain layoffs) mandate severance separately. Common market practice ranges from 1–2 weeks of pay per year of service for nonexempt staff to 2–4 weeks per year for executives, often with a floor of 4–8 weeks.
"Gratuity" is a single lump-sum payment made when employment ends, calculated from an employee’s tenure and pay. In many countries the term is a legal entitlement, but in the United States it is a voluntary benefit that appears in an employer’s written severance policy or a negotiated separation agreement. That distinction matters: there is no federal law that obligates a US employer to pay gratuity, so the schedule — not a statute — is what determines your number.
Laid-off employees checking an offer against the written policy; HR and finance teams budgeting a reduction in force; and employees negotiating a voluntary separation package who need a defensible baseline before they counter.
A gratuity estimate covers base salary only. It typically excludes accrued but unused paid time off (often paid out separately by state law), the value of unvested equity, bonus proration, and COBRA subsidy. Those are usually negotiated as separate line items, so treat the calculator output as the salary-based core of the package, not the whole offer.
⚠️ Important: Gratuity and severance are not federally mandated in the United States. This estimate applies the schedule you enter and is not a legal entitlement or a guarantee of payment. Consult an employment attorney or your HR department to confirm what your policy or contract requires.