— Salary & Income
Severance Pay Calculator
Estimate a severance package after job loss or during negotiations. Enter salary, years of service, severance formula, accrued PTO, and notice pay to see gross payout, after-tax amount, and how many months of runway it covers.
Total payout
$24,615.38
- Net (after-tax) payout
- $17,316.92
- Severance pay
- $24,615.38
- Months of salary
- 3.69
- Total withholding
- $7,298.46
Try: $80k, 8 years, 2 weeks/year, + 15 PTO days + 4 weeks notice, 1 month/year, 10 years, $120k, 20 years, capped at 26 weeks
— Payout breakdown
| Item | Amount |
|---|---|
| Severance pay | $24,615.38 |
| = Total payout (gross) | $24,615.38 |
| − Federal withholding (22%) | $-5,415.38 |
| − FICA | $-1,883.08 |
| = Net payout | $17,316.92 |
— How it works
Severance = years of service × weeks (or months) per year × your weekly (or monthly) pay, optionally capped. Add accrued PTO (days × daily pay) and notice (weeks × weekly pay). Net applies 22% federal supplemental withholding + FICA + state.
How severance is worked out
Most severance is a multiple of pay per year of service — often one or two weeks of salary for each year worked (in many countries it’s a month per year). Eight years at two weeks a year is sixteen weeks’ pay. Employers frequently cap it, say at 26 weeks, and some require a minimum length of service to qualify at all. On top of the severance itself, you’re usually owed any accrued, unused PTO, and notice may be paid in lieu of working it.
Worked example — $80,000 salary, 8 years, 2 weeks per year: 16 weeks × $1,538/week = $24,615 gross. After 22% federal withholding and FICA, about $17,317 net. That’s roughly 3.7 months of salary of runway.
Tax: severance is supplemental pay
Severance, PTO payout and pay-in-lieu are all taxable wages. Employers withhold federal tax on them at the flat 22% supplemental rate (37% on amounts over $1M in a year), plus FICA and any state supplemental rate. So a package lands roughly 25–40% lighter than the headline. As with a bonus, the 22% is withholding, not your final tax — it’s reconciled when you file, so a lower marginal rate means some comes back.
How much runway it buys
The most useful way to read severance is in months: the calculator divides the gross payout by your monthly salary to show roughly how long it bridges you. A bigger package, accrued PTO and notice all extend that runway. Treat it as a cushion while you job-hunt — and remember the net figure is what actually reaches your account. This is an estimate; your actual entitlement depends on your contract, company policy and local law.
— Reader questions
How is severance pay calculated?
Typically pay per year of service: years × weeks (or months) per year × your weekly (or monthly) salary. For example 8 years at 2 weeks a year on an $80,000 salary is 16 weeks, about $24,600 gross.
How much severance is typical?
In the US, often one to two weeks of pay per year of service, sometimes capped. In many other countries a statutory minimum of around one month per year applies. There’s no federal US requirement — it depends on your contract and employer policy.
How is severance taxed?
As supplemental wages: 22% flat federal withholding (37% above $1M), plus FICA (7.65%) and any state rate. That’s withholding, not final tax — it’s reconciled when you file, so your actual tax may be lower or higher.
Is accrued PTO paid out in severance?
Unused PTO is usually paid separately as part of your final pay, valued at your daily rate. Enter your accrued days and it’s added to the package here.
How many months will my severance last?
Divide the payout by your monthly salary. A 16-week package is about 3.7 months of salary — though the net (after-tax) amount is what you actually have to live on.