Severance Pay Calculator
Estimate a severance package with the weeks-per-year-of-service formula, then see the after-tax payout once 22% withholding, FICA, and state tax come out.
Severance Pay Calculator
Severance formula
Common policies: 1 week per year (standard), 2 weeks (generous), 4 weeks (about a month, executive).
State tax (optional)
A rough estimate: state rates are graduated and vary. For exact, W-4-driven state math, use the salary after tax by state tool.
These figures are an estimate, not your final tax bill. Severance is taxed at your regular marginal rate when you file, so if 22% is more than your bracket, the difference comes back as a refund. Severance IS subject to Social Security and Medicare.
Weeks of severance is years of service times weeks per year, capped if you set a ceiling.
How severance pay is calculated
Most severance comes down to one formula: weeks of pay per year of service times your weekly pay. Weekly pay is your annual base salary divided by 52, the same weekly period the payroll tools use. Multiply that weekly figure by the weeks your policy grants per year, times your years of service, and you have the gross severance before tax. Add any unused PTO or vacation payout on top, since that money is paid and taxed the same way.
Typical multipliers run one week per year (a standard policy), two weeks per year (a generous one), and up to about a month per year for senior or executive roles. Many employers cap the total, often near 26 weeks, so a long tenure does not push the number sky-high. If you set a cap in the calculator, the lower of the formula result and the cap wins.
Worked example: a $80,000 salary at two weeks per year with five years of service gives a weekly pay of about $1,538.46, times 10 weeks, for a gross severance of $15,384.62. If your policy capped the payout at 8 weeks, the gross would drop to $12,307.69 instead.
How much of your severance is taxed?
The IRS treats severance as supplemental wages, so federal income tax usually comes out at the flat 22% supplemental rate on the first $1,000,000, then 37% on anything above that. On top of that you pay Social Security at 6.2% up to the 2026 wage base of $184,500, and Medicare at 1.45% with no cap. State income tax is the variable part: some states apply their own flat supplemental rate, others use regular tables, and nine states have no broad income tax at all.
That withholding is an estimate, not your final tax bill. Severance is taxed at your regular marginal rate when you file, so if the flat 22% is more than the bracket you actually land in, the difference comes back as a refund. A bonus check runs on the same math, so the bonus tax calculator is a good companion here.
Severance after tax: what actually lands in your account
Take that $15,384.62 gross. Federal withholding at 22% is $3,384.62, Social Security is $953.85, and Medicare is $223.08. With no state tax, total withholding is $4,561.54, leaving a net severance of about $10,823.08. If your state levies a 5% effective rate, another $769.23 comes out and net drops to roughly $10,053.85.
The number that answers the real question is months of runway: your net severance divided by your current monthly pay. At $80,000 a year, that $10,823 net covers about 1.6 months of gross pay. Runway is a planning number, not a promise, but it tells you roughly how long the check holds you over while you line up the next role. To weigh it against your normal take-home, run the salary to paycheck calculator.
Severance, PTO, and unemployment
Whether unused PTO gets paid out depends on your state and your employer policy. When it is paid, it is taxed like the rest of the severance check. Severance can also affect unemployment: some states delay or reduce benefits while a severance is being paid, others do not count it, so check your state agency before you assume anything.
This page keeps the state side to a single editable effective rate so it stays honest and quick. For exact, W-4-driven withholding across all 50 states and DC, or to gross a target net payout back up, use the salary after tax by state and payroll gross-up calculator tools, or run the full numbers in the WorkLogs44 Payroll Calculator app.
Frequently Asked Questions
Common questions about severance pay calculator
How is severance pay calculated?
The usual formula is weeks of pay per year of service times your weekly pay, where weekly pay is your annual base salary divided by 52. Private-sector policies tend to run one to two weeks per year of service, with senior and executive roles getting more, and many employers cap the total (26 weeks is a common ceiling). Any unused PTO or vacation payout gets added on top.
Is severance pay taxed?
Yes. Severance is fully taxable as ordinary income, and the IRS treats it as supplemental wages, so no, it is not tax-free. You pay federal income tax, Social Security, and Medicare on it, plus state income tax if your state has one.
How much tax is withheld from severance?
Federal income tax usually comes out at the flat 22% supplemental rate, plus 6.2% Social Security (up to the wage base) and 1.45% Medicare. Add state tax and total withholding often lands somewhere around 30% to 40%. Keep in mind this is withholding, not your final tax bill.
Is severance subject to Social Security and Medicare?
Yes. Severance is subject to FICA: 6.2% Social Security up to the annual wage base ($184,500 in 2026) and 1.45% Medicare with no cap. This catches a lot of people off guard, since they assume FICA does not apply to a severance check. It does.
Why is the 22% withholding more than my normal paycheck rate?
Supplemental wages like severance and bonuses use a flat 22% federal method instead of your usual W-4 tables. If 22% is higher than the marginal bracket you actually land in for the year, the extra comes back as a refund when you file. The bonus tax calculator works the same way.
Is unused PTO or vacation paid out with severance, and is it taxed?
Whether unused PTO gets paid out depends on your state and your employer policy. When it is paid, it is taxed like the rest of the check, so the same federal, FICA, and state withholding applies.
How many weeks of severance is typical?
One to two weeks of base pay per year of service is typical in the private sector, and more for senior and executive roles. Employers commonly cap the total number of weeks, often around 26. Severance usually is not legally required, so the amount tends to come down to policy or negotiation.
Will severance affect my unemployment benefits?
It can. Some states delay or reduce unemployment benefits while severance is being paid, and others do not count it against you. Check your state unemployment agency for how they handle it. This is general guidance, not legal advice.