Severance Pay Calculator

Yes. It works as a severance pay tax calculator: federal income tax, Social Security, Medicare and the state's income tax by that state's 2026 withholding formula come out of the package, and the take-home pay shows beside the gross.

Most employers pay a number of weeks of pay for each year of service, often with a minimum and a maximum: 2 weeks per year for 6 years on $1,000 a week is $12,000. Unused PTO and health premiums are often added. The severance calculator above adds them up and shows the taxes.

Not under federal law: the FLSA has no severance requirement, so it depends on your policy or the agreement. Some states add duties in a mass layoff; New Jersey, for example, requires one week of severance per year of service.

As wages. Social Security and Medicare apply. Paid as one lump sum, federal income tax may be withheld at the 22% flat rate for supplemental wages paid separately (37% on the part above $1,000,000); paid as salary continuation, each payment is withheld like a regular paycheck. State income tax comes on top.

Under 5 U.S.C. 5595: one week of basic pay for each year of creditable service through 10 years, two weeks for each year beyond 10, and a quarter of that for each full 3 months past the last full year. Then 2.5% more for each full 3 months of age over 40. The fund is capped at 52 weeks in a lifetime and paid at the regular pay intervals, usually every two weeks.

Wages for a notice period the employee does not work, at the regular rate. Where the federal WARN Act applies (100 or more employees and a plant closing or mass layoff), it requires 60 days of written notice, and an employer who gives less owes back pay and benefits for each day of the violation, up to 60 days. The calculator adds the weeks you enter to the package, taxed like the severance.

Severance pay, often unused PTO, sometimes health premiums for a few months, and a release of claims the employee signs in return. A release of age claims from someone 40 or older needs 21 days to consider (45 in a group layoff) and 7 days to revoke.

Yes. Severance is wages, so Social Security stops once the year's wages reach the cap ($184,500 in 2026); Medicare has no cap.