Severance pay for federal employees separated involuntarily, from 5 CFR 550 Subpart G
Updated October 2026
1. Basic allowance. 1 week of basic pay per full year of creditable service through 10 years, 2 weeks per full year beyond 10, plus 25% of the applicable weekly amount for each full 3 months beyond the last full year. 2. Age adjustment. 2.5% of the basic allowance for each full 3 months of age over 40. 3. Total, limited to 52 weeks of basic pay over your lifetime.
OPM example: $1,500 weekly basic pay, 20 years 4 months of service, age 45 years 8 months. First 10 years: 10 × $1,500 = $15,000. Years 11-20: 10 × 2 × $1,500 = $30,000. The extra 4 months contain one full quarter: 25% × 2 weeks × $1,500 = $750. Basic allowance $45,750. Age: 5 years and 2 full quarters over 40 = 22 quarters × 2.5% = 55% × $45,750 = $25,162.50. Total $70,912.50, 47.275 weeks.
Under 5 U.S.C. 5595, full-time and part-time employees with a regularly scheduled tour of duty, a qualifying appointment and at least 12 months of continuous service (no break over 3 days) who are involuntarily separated for reasons other than inefficiency. You are not eligible if you can retire on an immediate annuity, declined a reasonable offer of another position, are receiving workers’ compensation, or are paid at or above Executive Schedule level I. A resignation counts as involuntary only after a specific or general written notice of separation that has not been canceled.
The rate of basic pay at separation includes locality pay and special rate supplements, plus standby duty premium, administratively uncontrollable overtime, law enforcement availability pay, firefighter straight-time pay, night differential and the Border Patrol overtime supplement. Other overtime, bonuses and allowances are excluded. For a 40-hour schedule, weekly pay is the annual rate divided by 2,087 and multiplied by 40. Variable schedules use the average of the last 26 pay periods.
| Employee | Basic allowance | Age adjustment | Total paid | Weeks |
|---|---|---|---|---|
| Age 45, 12 years of service, $1,600 a week | $22,400.00 | $11,200.00 | $33,600.00 | 21.00 |
| Age 55, 25 years, $2,000 a week (if not eligible for an immediate annuity) | $80,000.00 | $120,000.00 | $104,000.00 | 52.00 (52-week cap) |
| Age 38, 4 years 6 months, $1,200 a week | $5,400.00 | $0.00 | $5,400.00 | 4.50 |
| Age 50, 18 years, $1,800 a week, 10 weeks received earlier | $46,800.00 | $46,800.00 | $75,600.00 | 42.00 (52-week cap) |
| OPM example: age 45 years 8 months, 20 years 4 months, $1,500 a week | $45,750.00 | $25,162.50 | $70,912.50 | 47.27 |
The 55-year-old with 25 years would reach the 52-week cap, but many employees at that age and service are eligible for an immediate retirement annuity, which rules out severance pay; check retirement eligibility first.
Severance pay accrues day by day after separation and is paid by the separating agency at the same intervals as salary, with income and Social Security taxes withheld. It stops when the fund is used up, and stops early if you take another federal or D.C. government job; weeks already received are recorded and count against the 52-week lifetime limit. If you are separated again later, the allowance is recomputed on all service and your new age, minus weeks already received. A time-limited federal appointment suspends payments, which resume afterward.
Use your SF-50 for the rate of basic pay and service computation date; count only full years and months of creditable civilian service (restored military service counts, other military service generally does not). Enter age at separation in years and months. If you have received severance pay before, enter those weeks.
It does not decide eligibility, how your agency counts service, or how severance interacts with unemployment compensation (states treat it differently), a deferred-resignation or VERA/VSIP offer, or a deferred FERS annuity. The servicing human resources office makes the official computation; for retirement-versus-severance decisions, ask HR for both estimates. The FERS retirement calculator estimates the annuity side.
Counting partial years as full. Only full years count, then full quarters at 25%. Applying the age adjustment by year. It counts quarters over 40. Expecting a lump sum. It is paid on the regular payroll schedule. Forgetting the 52-week lifetime cap when you received severance before. Assuming retirement-eligible employees also get severance. Eligibility for an immediate annuity rules it out.