Skip to content
ᐅ My Access Florida – You Login to Access Florida ✅ ☎

How to calculate severance pay or severance pay

The settlement calculationIf you work in the United States, it is severance pay, that is, severance pay, which is authorized if you are a full-time or part-time employee who also meets the conditions to be eligible to collect severance.

Well, as you should already know in the United States, most workers are employed as workers at will, that is, without signing a contract, therefore if you are unjustifiably dismissed, you will be worried about how you can do to estimate the value you will charge for your compensation, then below you will find the way to make that calculation that worries you so much:

How to calculate the settlement in the United States

First of all it will be useful to do the settlement calculation if you are eligible to collect severance pay and you will be if you are an employee whose job requires a certain qualification, if you work regularly and continuously for 12 months and have also been separated from work for questions that have nothing to do with your inefficient behavior.

You will not be eligible to collect compensation if you do not have a qualified job, if you have rejected a job offer to fill another job and if at the time of termination you receive compensation for injuries.

Now that you know if you are eligible to collect compensation, you can make the calculation considering several concepts such as the basic allowance for compensation, since it corresponds to you:

1.1 pay week according to the basic pay rate considering your job position when you were separated from the company and for each year that you provided your services over 10 years.

  1. 2 weeks of pay according to the basic pay rate considering the job position you held when you were separated from the company for each year that you provided your services, exceeding 10 years.
  2. 25% of the applicable value for every three months in which you provided your services and that is creditable regardless of the final full year.
  3. If your work schedule was variable, the weekly basic pay rate will be determined based on the weekly average of the last job you held over the 26 pay periods prior to your separation from the company.
  4. You must also calculate the allowance for age adjustment that influences a 2.5% increase in the basic allowance for 3 months of more than 40 years.
  5. There is even a lifetime limit, it means that you cannot receive a value greater than 52 weeks for your compensation during your life.

Calculation of severance pay

If you are eligible to receive compensation and have signed an employment contract, you should review the contract because in it you will be able to read how to do the settlement calculation.

If you work receiving hourly pay, you will receive one week as severance pay for each year you worked at the company.

In this way, if you worked for that company that fired you for four full years, your compensation will correspond to the calculation of four weeks.

In the event that you are salaried, then you will receive two weeks for each year that you worked in the company.

You will get the weekly pay rate by dividing the annual salary by 52 and then multiplying the pay rate by the number of weeks.

For example, if you earn $ 50,000 per year, you will calculate that you earn $ 769 per week, so if you were fired and worked for that company for 10 years, your severance pay will be $ 7,690.

If you have signed a contract but it does not have any severance clause, you can negotiate it with your employer, because if you have worked for 40 years in that company consider a severance package because it protects you under federal law, but you have up to 21 days to consider it and raise it with your employer.

Anyway, always keep in mind that in the United States it is not necessary to sign a contract for you to enter a company to work, because you will enter as a worker at will and therefore without signing a contract, your employer can fire you at any time, but You also have the right to leave your job or resign when you consider it convenient for you, since the law does not even require a notice, despite the fact that a two-week notice is generally agreed for both parties.

Even in the same way that there is no federal law that requires advance notice, neither does it require the employer to pay for liquidation.

Therefore everything will depend on the individual contract you have signed with your employer, unless you are a unionized worker.

Liquidation for unjustified dismissal in Mexico

According to the LFT, Federal Labor Law, if one day you arrive at work and are surprised with the news of an unjustified dismissal, you have rights that your employer must respect regarding the payment that corresponds to you, which is made up of a compensation of 3 months or 90 days whose objective is that for 3 months you can meet the expenses until you can get a new job and also works as a sanction for your employer who has left you without work and therefore without a source of income.

It is a fixed amount of money that has nothing to do with your length of time in that job or your profile as an employee.

You are entitled to a compensation of 20 days per year and your employer will consider the years worked, because the law does not specify whether it should be interpreted as proportional to your services rendered or for the entire year

Settlement calculation

The settlement is what you receive as payment for contractual benefits, as the Federal Labor Law requires it when as a worker you resign voluntarily, that is, you as a worker and your employer make an agreement that results in the termination of the employment relationship.

From this, according to the law, you have the right to receive the vacation bonus, 6 days of vacation, 15 days of Christmas bonus and the wages that have remained pending.

To calculate the settlement you must keep in mind the date you joined the company, the date on which the provision of your services ceased, your monthly salary and the integrated diary:

  1. To calculate the bonus you must perform the calculation proportional to it. They are 15 days that you will divide by 365 and its result will be the factor per day worked.
  2. You will multiply the factor per day worked by the number of days you worked. You will get a certain number of days, the result of which you multiply by your daily salary and it will give you the proportional part.
  3. You will calculate the part proportional to the holidays. You will divide the number of vacation days by 365 days and you will get the factor per day worked. Then you will multiply it by the number of days you worked. The result will be multiplied by the daily salary and you will obtain the total of the proportional part.
  4. To calculate the vacation premium you will multiply the proportional part of vacation by 25% and you will obtain the vacation premium.
  5. Finally, you will add all the data that you obtained with the calculations of all the concepts and you will obtain the value of the settlement.