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Severance Pay Calculator

Estimate a severance package and what survives withholding: weeks per year of service, the 22% supplemental rate, FICA, and the net amount to plan around.

$
years
weeks
weeks
$
%
Xfin

Gross severance

$17,307.69

Severance weeks
10
Weekly pay
$1,730.77
Federal withholding (22% flat)
$3,807.69
Social Security
$1,073.08
Medicare
$250.96
Additional Medicare
$0.00
State withholding
$0.00
Total withheld
$5,131.73
Net severance
$12,175.96
See how long this money lasts

Sends your severance weeks to the layoff runway calculator.

Quick answer: With the example inputs this page loads by default, the headline result (Gross severance) comes to $17,307.69. Estimate a severance package and what survives withholding: weeks per year of service, the 22% supplemental rate, FICA, and the net amount to plan around. Change any input above and every figure updates instantly in your browser.

Figures shown are for the 2026 tax year. The calculator always applies the current year's figures.

Your inputs never leave your browser, and nothing is stored. See our privacy policy .

Fact-check: results on this page are verified against an independently coded reference oracle that covers all 106 calculators on this site. See how we verify .

US law does not require severance; when offered, packages commonly run one to two weeks of pay per year of service, sometimes on top of a base amount. Severance is taxable wages withheld at the 22 percent supplemental rate plus Social Security and Medicare, so the check is noticeably smaller than the offer letter. This calculator sizes the package and the net amount you can actually plan around.

What this result means

The net figure is the one that matters, because it is the cash that funds your job search; feed it into the layoff runway calculator to see how many months it buys. If withholding at the flat 22 percent overshoots your real bracket in a lower-income year, which is common after a layoff, the difference returns as a refund at filing. Severance timing can also matter: a lump sum lands in one tax year, salary continuation can straddle two, and unemployment benefits in many states are delayed or reduced while severance is paid. Not tax or legal advice.

Assumptions

  • Severance is a matter of agreement, not law: the Fair Labor Standards Act does not require it, and many workers receive none. The weeks formula here (years of service times weeks per year, plus base weeks) mirrors the common package structure; your offer letter controls the real number.
  • Weekly pay is annual salary divided by 52. Severance is modeled as a single lump sum paid this year; salary-continuation arrangements that straddle tax years, and benefits like COBRA subsidies or outplacement, are not modeled.
  • Withholding follows the supplemental-wage percentage method (IRS Publication 15): a flat 22 percent federal (37 percent above $1 million), Social Security on the part within the wage base after your year-to-date pay, Medicare on the whole amount, the 0.9 percent Additional Medicare above your filing status threshold, and the flat state rate you enter. Employers using the aggregate method can withhold a different amount.
  • This models withholding, not your final tax: severance is ordinary wage income, and in a layoff year the flat 22 percent often overshoots your real bracket, returning the difference as a refund at filing.
  • Unemployment benefit interactions are not modeled: many states delay or reduce benefits during the weeks severance covers, under rules that vary by state.
  • This is an estimate for educational purposes only, not tax, legal, or negotiation advice.

Key terms

Definitions for the terms this calculator uses, in our finance glossary .

How it works

Severance has no legal formula because it has no legal requirement: under the Fair Labor Standards Act, severance is a matter of agreement between employer and employee. When companies offer it, the common structure is weeks of pay per year of service, often one to two, sometimes on top of a flat base amount.

The package. Weekly pay is annual salary divided by 52. Severance weeks are years of service times the per-year formula plus base weeks, and gross severance is weekly pay times those weeks.

The withholding. Severance is supplemental wages, so the same stack as a bonus applies (and this calculator shares that exact code with the bonus calculator): a flat 22 percent federal (37 percent above $1 million), 6.2 percent Social Security on whatever part still fits under the $184,500 wage base after your year-to-date pay, 1.45 percent Medicare on all of it, 0.9 percent Additional Medicare above the threshold, and your state’s flat supplemental rate. In a layoff year the 22 percent often overshoots your real bracket, and the difference returns at filing.

Worked example

$90,000 salary, 5 years of service at 2 weeks per year, $45,000 earned so far this year, single, no state rate.

  • Weekly pay: $90,000 / 52 = $1,730.77. Weeks: 5 x 2 = 10.
  • Gross severance: $17,307.69.
  • Withholding: 22% ($3,807.69) + Social Security ($1,073.08) + Medicare ($250.96) = $5,131.73.
  • Net severance: $12,175.96, the figure to feed into a runway plan.

Scope and limitations

A lump-sum package under the percentage withholding method. Not modeled: salary continuation across tax years, the aggregate withholding method, COBRA and equity treatment, state unemployment interactions (many states delay or reduce benefits during severance weeks), and negotiation. This is an estimate for education, not tax, legal, or negotiation advice.

Sources

Frequently asked questions

How much severance pay is normal?
One to two weeks of pay per year of service is the most common formula, sometimes with a base amount on top, and executives often negotiate more. But there is no legal floor: severance is not required by the FLSA, and many workers receive none. The formula, the cap, and any conditions all live in the agreement you sign.
How is severance pay taxed?
As ordinary wages. Employers typically withhold the flat 22 percent supplemental federal rate plus Social Security and Medicare, and state tax where it applies. On your return it is regular income, so if the layoff cuts your year's earnings, the flat withholding often overshoots and part of it comes back as a refund.
Can I get unemployment while receiving severance?
It depends on your state. Some states pay unemployment alongside severance, others delay or reduce benefits during the weeks the severance covers, and lump sums versus salary continuation can be treated differently. Check your state's unemployment office before building both into your runway plan.
Should I negotiate my severance package?
Often, yes. Weeks of pay, the treatment of unvested equity, COBRA coverage, the release terms, and even the payment timing (lump sum versus continuation, this year versus next) can all move. A severance agreement is a contract in exchange for your signature on a release, which is exactly the setting where terms are negotiable.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: Severance Pay: What to Expect, How It Is Taxed, and What You Keep

By Sam Sage Last reviewed .