Calculating your severance pay is straightforward once you know the Severance Pay formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Severance Pay Calculator.
What is Severance Pay?
The Severance Pay calculation tells you your severance pay from a few simple inputs. The figure you are solving for here is the severance pay, expressed in INR.
The Severance Pay formula
The core formula is:
Severance pay = Monthly salary × Months pay per year of service × Years of serviceHere is what each input means:
- Monthly salary — a money amount. Example: ₹50,000.
- Years of service — a number. Example: 10.
- Months pay per year of service — a number. Example: 0.5.
How to calculate it step by step
- Write down the monthly salary (for example, ₹50,000).
- Write down the years of service (for example, 10).
- Write down the months pay per year of service (for example, 0.5).
- Apply the formula above to get your severance pay.
- Double-check the result with the Severance Pay Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Monthly salary | ₹50,000 |
| Years of service | 10 |
| Months pay per year of service | 0.5 |
| Severance pay | ₹2,50,000 |
With monthly salary of ₹50,000, years of service of 10 and months pay per year of service of 0.5, the severance pay works out to ₹2,50,000.
Example 2
With monthly salary of ₹1,00,000, years of service of 10 and months pay per year of service of 0.5, the severance pay works out to ₹5,00,000.
| Result | Value |
|---|---|
| Severance pay | ₹5,00,000 |
Example 3
With monthly salary of ₹25,000, years of service of 10 and months pay per year of service of 0.5, the severance pay works out to ₹1,25,000.
| Result | Value |
|---|---|
| Severance pay | ₹1,25,000 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
Prefer not to do the maths by hand? — the Severance Pay Calculator does it instantly, for free, with the formula and a worked example built in.
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