Severance pay calculator.
Estimate your gross and net severance from your salary and the number of weeks offered.
Estimates only. PTO payout rights and tax withholding vary by state, employer policy, and individual circumstances. This is not legal, tax, or financial advice. Consult your state labor department or a qualified professional. See our methodology.
How severance is calculated
Most severance packages are quoted in weeks of pay — often one to two weeks per year of service. We convert your annual salary to a weekly figure (salary ÷ 52) and multiply by the number of weeks offered, then estimate withholding. Because severance is a supplemental wage, the 22% flat federal rate applies, along with your state rate and FICA.
Worked example: a $78,000 salary is $1,500/week. At 2 weeks per year for 8 years (16 weeks), gross severance is $24,000. After 22% federal, 7.65% FICA, and a typical state rate, net is roughly $16,000–$17,000.
How much severance is typical?
There is no legal standard, but one to two weeks of pay per year of service is common for most employees, while executives often negotiate up to a month per year. Amounts are usually negotiable unless fixed by a written policy or contract — see the negotiation note below.
Is severance pay taxable? How severance pay is taxed
Yes, severance pay is taxable. Severance is a supplemental wage: employers withhold a flat 22% federal rate (37% above $1M), plus your state supplemental rate and 7.65% FICA. The 22% is a withholding rate, not your final tax rate — if it exceeds what you owe, you get the difference back when you file. Deferring part of a payout into a 401(k) or HSA, where allowed, can reduce the immediate tax.
Severance pay and unemployment
Whether severance affects unemployment depends on your state and how it is paid. A one-time lump sum often does not reduce benefits in many states, while salary continuation (paid over several weeks) can delay or reduce your weekly benefit for the weeks it covers. Always report severance when filing your claim and let the state determine the effect.
Federal severance pay calculator & RIF severance
Federal employees and those affected by a reduction in force (RIF) follow OPM severance rules, which use a formula based on years of service and age. This calculator applies the same weeks-per-year math used in most RIF packages — enter your salary and weeks offered to get a gross and net estimate. For the exact OPM formula, confirm with your agency HR.
Negotiating severance pay
No federal law requires severance. The WARN Act can require 60 days’ notice (or pay in lieu) for large mass layoffs and plant closings, but otherwise severance is voluntary — which is why negotiating severance pay before you sign is often worth the effort. Common negotiating points include additional weeks, extended benefits, and outplacement services.
Leaving a job usually means severance and a PTO payout. Add the value of your unused time with the PTO payout calculator, and check whether your state requires a PTO payout for your full exit total.
Frequently asked questions
How is severance pay calculated?
A common formula is one to two weeks of pay per year of service. Multiply your weekly pay (annual salary ÷ 52) by the number of severance weeks offered. There is no federal law requiring severance — the amount is set by company policy or your agreement.
How much severance pay is typical?
Typical severance is one to two weeks of pay per year of service for most employees; executives often negotiate one month per year. A 10-year employee might receive 10–20 weeks. The amount is negotiable unless fixed by a policy or contract.
How is severance pay taxed?
Severance is a supplemental wage: a flat 22% federal withholding (37% above $1M), your state supplemental rate, and 7.65% FICA (Social Security + Medicare). The 22% is a withholding rate, not your final tax rate — it is reconciled when you file.
Does severance pay affect unemployment?
It depends on your state and how severance is paid. A one-time lump sum often does not reduce benefits in many states, while salary continuation (paid over several weeks) can delay or reduce your weekly benefit for the weeks it covers. Check your state unemployment office.
Can you collect unemployment and severance pay?
In many states, yes — especially with a lump-sum payment. Some states treat severance as disqualifying income for the weeks it covers and others do not. Report your severance when you file your claim and let the state determine the effect.
What is RIF (reduction-in-force) severance?
RIF severance is the package offered when a position is eliminated in a layoff or reduction in force, rather than for performance. It is calculated the same way (weeks per year of service) and is taxed as a supplemental wage. Federal employees follow OPM severance rules.
Is severance pay required by law?
No federal law requires severance. The WARN Act can require 60 days’ notice (or pay in lieu) for large mass layoffs, but otherwise severance is voluntary unless promised in a policy, contract, or separation agreement.
Does severance affect my PTO payout?
They are separate. Severance is optional compensation for leaving; PTO payout is for time you already earned and may be legally required in your state. You can receive both — add your PTO payout for your full exit total.
Severance pay by state