Estimate what a severance offer should look like, check it against the formula your employer is using, and see how long it covers you.
Severance is usually withheld at the 22% federal supplemental rate rather than through ordinary brackets. Social Security and Medicare apply unless you have already reached the wage base for the year.
Estimated severance, after tax
$0
Gross severance
$0
Weeks of pay
0
Covers this many months
0
| Line item | Amount |
|---|---|
| Weeks from years of service | 0 |
| Weekly pay | $0 |
| Severance base | $0 |
| Unused vacation payout | $0 |
| Gross package | $0 |
| Federal withholding at 22% | $0 |
| State withholding | $0 |
| Social Security and Medicare | $0 |
| Estimated net payment | $0 |
One to two weeks of pay for each year of service is the most common range for non-executive roles in the United States, with a floor of around two weeks regardless of tenure. Senior roles often negotiate three to six months or more. Severance is generally a matter of company policy or negotiation rather than legal entitlement: federal law does not require it, and only a few states impose obligations in specific circumstances such as mass layoffs.
It is taxed as ordinary income, but usually withheld differently. Employers commonly apply the federal supplemental wage rate of 22% to lump sum payments rather than normal bracket withholding. That means the amount withheld may not match what you actually owe: you could owe more at filing time if your marginal rate is higher, or get a refund if it is lower. Social Security and Medicare still apply unless you have already hit the wage base.
It depends on state law and company policy. Roughly half of US states treat accrued vacation as earned wages that must be paid on separation, while others allow a forfeiture policy if stated clearly in advance. Some states also require payout of accrued sick leave. Check your state labor department rules and your handbook, and do not assume a policy that contradicts state law is enforceable.
Often yes, particularly on three items: more weeks of pay, continued health cover or a subsidy for it, and the release language itself. Employers frequently have more room on benefits continuation and on the wording of non-disparagement or non-solicit clauses than on the cash amount. Consider asking for outplacement support and for equity vesting treatment to be stated explicitly. Before signing anything containing a release of claims, have an employment attorney review it.