Severance pay

Almost_Separated

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
how is severance pay calculated??
From http://www.militarydisabilitymadeeasy.com/doddisability.html#medsep

"DoD Disability for Medical Separations

If the service member is given a Total Combined Military Disability Rating of 0%, 10%, or 20%, he is medically separated from the military.

All medically separated service members receive a single lump-sum severance payment for their DoD Disability. This payment is equal to 2 months of basic pay for each year of military service he gave. The minimum number of years is 6, so even if he only served for 2 years, his payment would be calculated as though he had served for 6 years. The maximum number of years is 19. Before January 28, 2008, the maximum was 12 years, and the minimum 3.

So, if Bob’s basic pay is $1,000/month and he served for 10 years, then his DoD Disability Severance Pay would be $20,000 (2 months: 2 x 1,000 = $2,000; for 10 years: 2,000 x 10 = $20,000).

Medically separated service members are not given any other benefits for their DoD Disability."
 

Keya10

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
From http://www.militarydisabilitymadeeasy.com/doddisability.html#medsep

"DoD Disability for Medical Separations

If the service member is given a Total Combined Military Disability Rating of 0%, 10%, or 20%, he is medically separated from the military.

All medically separated service members receive a single lump-sum severance payment for their DoD Disability. This payment is equal to 2 months of basic pay for each year of military service he gave. The minimum number of years is 6, so even if he only served for 2 years, his payment would be calculated as though he had served for 6 years. The maximum number of years is 19. Before January 28, 2008, the maximum was 12 years, and the minimum 3.

So, if Bob’s basic pay is $1,000/month and he served for 10 years, then his DoD Disability Severance Pay would be $20,000 (2 months: 2 x 1,000 = $2,000; for 10 years: 2,000 x 10 = $20,000).

Medically separated service members are not given any other benefits for their DoD Disability."
I've seen that one and I've seen something different on dfas website
 

gsfowler

Super Moderator
Staff Member
PEB Forum Veteran
Severance is 2 times your basic pay, times your years of service. Use 3 or 6 years as a minimum. (depending on your circumstance)

  • Soldiers are credited with a minimum of 3 years of service as computed under 10 USC 1208 unless they qualify for the minimum 6 years of service.
  • To qualify for the minimum 6 years, the disability must be incurred in line of duty in a combat zone as designated by the Secretary of Defense OR incurred during the performance of duty in combat-related operations as designated by the Secretary of Defense. DoD policy for the "combat related operations" determination is that the disability must be incurred as a result of armed conflict as set forth in DoD Instruction 1332.38, paragraph E3.P5.1.2.
 

Keya10

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
Does anyone know how the taxes are calculated for the severance pay
 

Cobra67

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
I really don't know how it is calculated. Mypay just posted my last pay amount for the 15th. I had 12 days of leave sold back and rated 39992.00 of severance for 8 years of service as a Sergeant. My total amount scheduled to post on the 15th is like 41,000 something. So... I thought I'd be getting about $8,000 less than that with 25% tax. Confused but not complaining.
 

gsfowler

Super Moderator
Staff Member
PEB Forum Veteran
@Keya10 Taxes will be withheld at the 25% tax rate for federal, if you are rated by the VA for the same condition, then you can request a tax refund from DFAS.

I have no issues posting information here on the forum more than once, but please be mindful that many answers to the questions that you have asked lately can be found with a simple search here.

This link below has instructions on how to get your severance taxes withheld back from DFAS.

https://www.dfas.mil/dam/jcr:e3acbee9-3f9f-494d-af60-bcc03142343c/GP ST Clair Decision1.pdf

Right now your base pay should be $2125.80, if you multiply that times two, then multiply that by how many years you have served (fractional, take the days and divide by 360) that will be your severance amount.

Here is an example: Lets say you have served for 3 years, 4 months and 10 days (1195 days), divide that by 360, you come up with 3.32 years.

So you take $2125.80 x 2 x 3.32 and you get $14,115.31, 25% of that is $3528.83, that would be the amount taxed if you served for 3.32 years.
 
Last edited:

Cobra67

PEB Forum Regular Member
PEB Forum Veteran
Registered Member
@Keya10 Taxes will be withheld at the 25% tax rate for federal, if you are rated by the VA for the same condition, then you can request a tax refund from DFAS.

I have no issues posting information here on the forum more than once, but please be mindful that many answers to the questions that you have asked lately can be found with a simple search here.

This link below has instructions on how to get your severance taxes withheld back from DFAS.

https://www.dfas.mil/dam/jcr:e3acbee9-3f9f-494d-af60-bcc03142343c/GP ST Clair Decision1.pdf

Right now your base pay should be $2125.80, if you multiply that times two, then multiply that by how many years you have served (fractional, take the days and divide by 360) that will be your severance amount.

Here is an example: Lets say you have served for 3 years, 4 months and 10 days (1195 days), divide that by 360, you come up with 3.32 years.

So you take $2125.80 x 2 x 3.32 and you get $14,115.31, 25% of that is $3528.83, that would be the amount taxed if you served for 3.32 years.
Great post,

Now question. They take the fraction of the days (lesser than 6 months)?

I was under the impression that they round up to the next year if you are +6 months and round down to the last year if you are -6 months
 

gsfowler

Super Moderator
Staff Member
PEB Forum Veteran
Great post,

Now question. They take the fraction of the days (lesser than 6 months)?

I was under the impression that they round up to the next year if you are +6 months and round down to the last year if you are -6 months
Yes, it is a fractional calculation, the minimum is 3 years or 6 years (if combat related). They do not round up or down.
 
data-matched-content-ui-type="image_stacked" data-matched-content-rows-num="3" data-matched-content-columns-num="1" data-ad-format="autorelaxed">
Top