Short Answer: The amount of time it takes to get severance pay varies depending on the company you worked for, your employment contract, and how you separated. Typically, it takes anywhere from a few days to a few weeks to start receiving severance pay. Keep in mind, the company may withhold severance pay until you have signed all the necessary paperwork, contracts, and/or settlements. And, not all companies offer severance pay — so it’s a good idea to review your employment contract for specifics. For more details, including information on Army separation pay, see below.
How Long Does It Take to Get Severance Pay?
You can expect to wait anywhere from a few days to a few weeks after you leave a company before you’ll start receiving severance pay. Wait times vary depending on the company you worked for, your employment contract, and the particulars of the separation.
To get a better idea of how long it takes to get severance pay, we contacted several large companies, including Boeing, Northrop Grumman, and the United States Post Office. We were unable to get specifics besides being told that severance pay is paid out “shortly” after your release. Keep in mind that in most cases, your funds won’t be released until you sign all severance paperwork, pending settlements, and/or end-of-employment agreements.
How Is Severance Pay Determined
Severance pay is a company perk and not a legal requirement. If your company offers severance pay and you’re considered eligible, the amount will likely be based on how long you were employed. For example, a common severance pay formula is one or two weeks’ pay for every year of employment — up to a set limit. Some companies will let you choose either a single lump sum or income continuation; others only offer a lump sum.
Eligibility for severance pay depends on your position at the company and the reason for your departure. If you are fired, you are most likely not eligible.
For specifics, review your employment contract. If there is no severance pay agreement in writing, it’s possible your company does not offer severance pay.
When Will I Get My Army Severance Pay?
If you’ve separated from the Armed Forces involuntarily, you may be eligible for separation pay. Involuntary separation can happen for a number of reasons, including a reduction in force. (This is not the same thing as disability severance pay, or disability compensation.)
Full separation pay is offered to service members who have served at least six years (but fewer than 20 years) and have been honorably discharged. Half separation pay is an option for those with a general discharge. You can review the Department of Defense’s “Separation Payments” summary to see if what you may be eligible for.
Details of when you’ll receive separation pay are extensive and best discussed with your Transition Assistance Program office. All payments are offered as a lump sum.