Determine the employee’s regular pay rate
Identify the severance formula used by the employer or required by law
Calculate the number of eligible years of service
Multiply the pay rate by the severance multiplier
Multiply the result by the number of eligible years of service
Add any required bonuses, commissions, or allowances if included
Subtract applicable taxes and deductions if required
Include unused vacation or leave pay if applicable
Verify the final amount against the employment contract or policy
Confirm any statutory minimums or caps that apply