Severance Pay Calculator
Estimate a typical severance package from your pay and years of service, and see what you might keep after tax.
Free · No sign-up · Runs in your browser · Last reviewed November 2026
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About the Severance Pay Calculator
There is no federal law requiring severance pay in the United States. When employers offer it, a common formula is one to two weeks of pay for every year of service, often with a minimum and a maximum, in exchange for a signed release. This severance pay calculator estimates the gross package from your salary and tenure and shows a rough after-tax amount, since severance is supplemental wage income that is commonly withheld at a flat 22% federal rate.
How to use it
- Enter your annual salary and years of service.
- Enter the weeks of pay per year offered, plus any negotiated extra weeks.
- Enter your state income tax rate and press Calculate severance.
Severance formula
Severance = weekly pay × (years of service × weeks per year + extra weeks). A $70,000 salary is $1,346 a week. With 6 years at 2 weeks per year, the package is 12 weeks, or about $16,154.
Typical severance guidelines
| Situation | Common offer |
|---|---|
| Rank-and-file employee | 1 to 2 weeks per year of service |
| Manager | 2 to 4 weeks per year |
| Executive | Often 6 to 24 months, set by contract |
| Mass layoff (WARN Act) | 60 days notice or pay in lieu, if the law applies |
Before you sign
- Review the release carefully and ask for time to consider it.
- Negotiate extra weeks, health coverage (COBRA) and a neutral reference.
- Ask how unemployment benefits are affected in your state.
- Consider speaking with an employment attorney.
Severance: a second example and what to check before you sign
Take a $104,000 salary, which is $2,000 a week. With 8 years of service at 1.5 weeks per year plus 4 negotiated weeks, the package is 16 weeks, or $32,000 gross. A lump sum would typically have 22% federal withholding ($7,040) and FICA of 7.65% ($2,448) if you are under the Social Security wage base, before state tax. Because that is only withholding, your final tax depends on your total income for the year.
Points worth checking
- Lump sum or installments. A lump sum may be taxed at a higher withholding rate, while installments may continue your pay schedule and could affect unemployment benefits depending on your state.
- Time to review. If you are 40 or older, federal law (the Older Workers Benefit Protection Act) gives you at least 21 days to consider a release (45 days for group layoffs) and 7 days to revoke.
- Health coverage. Ask whether the employer will subsidize COBRA premiums.
- Accrued pay. Unused vacation and final wages may be owed separately depending on state law and company policy.
For other variable pay, see the bonus tax calculator.
Frequently asked questions
Is severance pay required by law?
Not in most cases. The federal WARN Act can require 60 days notice for large layoffs, and contracts or company policy may promise severance.
How much severance should I expect?
One to two weeks per year of service is common for many employees, with more for senior roles.
Is severance taxable?
Yes. It is taxed as ordinary income, and employers often withhold 22% federal plus FICA and state tax.
Can I collect unemployment with severance?
Rules vary by state. Some states reduce benefits while you receive severance.
Can I negotiate severance?
Often yes. You can ask for more weeks, continued benefits or other terms before signing the release.
Is severance pay required by law?
In most cases, no. There is no general federal requirement, although a contract, policy or union agreement may promise it. The WARN Act separately requires notice for certain large layoffs.
Can I negotiate a severance offer?
Often yes. Common asks are extra weeks of pay, subsidized COBRA, accelerated equity vesting, a neutral reference and more time to decide. Consider having an employment lawyer review a significant offer.
Last reviewed: November 2026. Estimates only, not tax, legal or financial advice.