Severance: How much can you expect?

Laid off? Here’s how much severance you can expect

By Mark Brown on May 7, 2014
Estimated reading time: 2 minutes

Years of service, age, position, industry and level of compensation all factor into a severance package

So you’ve come into work to find out it’s your last day. Years of service, age, position, industry and level of compensation all factor into a severance package, says Michael Wright, an employment lawyer with Cavalluzzo. But unless terms are spelled out in an offer letter or written employment agreement there’s no set rule to determine a payout, he warns. As these purely illustrative examples show, packages vary. Seek legal advice if you ever find yourself in this position. [mp3j track=”https://www.moneysense.ca/wp-content/uploads/2014/05/2014-eppel-may-10111.mp3″ title=”Play: Mark Brown talks severance pay with 680 News’ Mike Eppel”] See which of the below scenarios most applies to you.

Name: Young and Employable

Age: 27 Position: Entry-level Salary: $45,000 (plus 50% off company services) Possible severance: Three months or $11,250 (plus continuation of 50% discount for that period) Employers might push for two months, but it’s tough to land a job in eight weeks. Don’t expect much more than that. Someone at this age and experience should have an easier time finding an equivalent job and pay than someone in a more senior role with more experience.

Name: Mid-Life Crisis

Age: 45 Position: Junior manager Salary: $88,000 Possible severance: 12 months or $88,000 (plus benefits and bonuses) At age 45 most workers are still very marketable, but it could take time to find equivalent employment at a similar income level. It ’s worth noting, though, that someone who has worked a few years more or a few years less might b e entitled to the same severance. That’s key. You don’t just multiply years to come up with a severance payout.

Name: Not Ready to Retire

Age: 64 Position: Manager Salary: $120,000 Possible severance: 24 months or $240,000 (plus pension contributions) Being laid off near retirement age doesn’t mean you can afford to retire, or even want to. A big payout is possible, provided the affected employee is diligently looking for new work. Collecting a pension shouldn’t affect severance either, as it is essentially a form of deferred wages.

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Laid off? Here’s how much severance you can expect

Name: Young and Employable

Name: Mid-Life Crisis

Name: Not Ready to Retire

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