What is a fair severance package — how much should I be getting?
The short answer
There is no federal law requiring severance pay for most private-sector employees, and no universal standard for what amount is "fair." A commonly cited market benchmark is one to two weeks of base pay per year of service, with more senior roles and longer tenures sometimes yielding higher multiples. Whether an offer is above, below, or in line with that benchmark depends on the employer, the industry, the circumstances of departure, and what the agreement actually says about how the amount is calculated. The clause language — how the amount is defined, whether it is prorated or lump sum, and what it excludes — is what to check in your specific agreement. Scan your agreement to see what the amount formula says and what compensation components it includes.
What Dang reviews here: Dang reviews the clause language in your severance agreement — what the severance amount, release, non-compete, and non-disparagement terms say and what to ask about them. It does not verify wage, hour, or leave compliance.
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What severance amount clauses usually look like
A severance clause typically states the total amount or a formula (e.g., one week of base salary per year of service), the payment form (lump sum or continued salary payments), and any conditions on receiving it — such as remaining through a transition date or not being terminated for cause. What counts as "base salary" versus total compensation, and whether bonus or commission is included, varies by agreement and matters for calculating what you are actually receiving.
A commonly cited benchmark in market practice is one to two weeks of pay per year of service — senior roles, longer tenures, or executive agreements often carry higher multiples. But these are soft market observations, not legal floors. Many employers offer less; some offer more. The amount in your agreement is the starting point for any negotiation.
Why people worry
Workers often have no reference point for what their employer typically offers and no easy way to know whether a colleague in the same situation received more. The worry is leaving money on the table — or signing without realizing that a short tenure or particular departure circumstance makes the offer lower than the benchmark. The calculation in the agreement itself may not be obvious from the clause language.
What to look for in your agreement
- The exact formula or dollar amount, and whether it is based on base pay only or total compensation.
- Whether bonus, commission, or equity is addressed — or conspicuously absent.
- The payment schedule: lump sum or installment, and whether installments are contingent on anything.
- Any condition that could reduce or forfeit the amount after signing.
- How the amount compares to the one-to-two-weeks-per-year benchmark for your tenure.
Questions to ask before signing
- Ask the employer to explain the formula behind the amount and what compensation components it includes.
- Ask the other party to clarify whether any outstanding bonus or commission is addressed separately.
- Confirm whether the payment structure can be changed to a lump sum if that works better for your situation.
- Consider having the agreement reviewed if the amount seems low relative to your tenure or role.
Why scan instead of guess
The general rule tells you the baseline. Your offer tells you what you’re actually being asked to sign — and the wording is what binds. Dang reads the document and flags the clauses worth reviewing, in plain English.
The deterministic engine scores and decides what’s risky. The AI only enriches the plain-English wording — AI extracts, code decides, never the other way around.
Your original file is deleted promptly after processing — we keep only the report you can read. No account needed for a one-time scan. Free preview first; full report $6.99, one-time.
Common questions
Does my employer have to pay severance?
Generally, no federal law requires private-sector employers to pay severance. Some states have narrow requirements tied to plant closings or mass layoffs; most do not. Whether you are owed severance depends on your agreement, offer letter, or employer policy — not a universal legal minimum.
Does the benchmark change for senior roles?
Market practice varies. Executive and senior agreements often carry higher multiples — sometimes a month or more per year of service — and may include equity acceleration or COBRA subsidies as additional value. The agreement wording determines what was actually offered to you.
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English — general information, not legal advice about your situation. For consequential decisions, consult a licensed attorney in your state.