🧰 ToolPicoAll Tools →

Severance Pay Calculator

Estimate a US severance package from your years of service and pay, or check an existing offer against common market norms. Includes plain-language WARN Act facts and unemployment-insurance context.

Not a legal entitlementIn the United States, severance pay is not required by law for most job separations -- it's discretionary, based on your employer's policy, an individual contract, or a union agreement. The WARN Act can require advance notice before certain large layoffs, but notice is not the same as severance. Everything below is a market-norm estimate, not a guaranteed amount -- always check your own offer letter, contract, or company policy.
Not required by law Common norm 1–2 wks/yr Free, instant estimate Updated: Jul 21, 2026
Decimals are fine for partial years -- e.g. 4.5 for 4 years and 6 months.
$
If you enter an annual salary, it's converted to a weekly rate by dividing by 52.
There is no legal formula for this -- these are common informal market norms, not requirements.
Some employer policies cap total severance at a maximum number of weeks. Leave this blank if you don't know of one.
%
Default 22% is the IRS federal flat rate for supplemental wages (which severance usually is). It does not include state income tax, Social Security, or Medicare -- see the net estimate note below.
Add optional package extras (PTO payout, bonus, notice pay-in-lieu)

These are common add-ons some severance packages include on top of the base severance formula above. Leave any field blank or at 0 to skip it.

$
Lump-sum payout of accrued, unused vacation or PTO, if your state/employer pays it out.
$
A pro-rated annual bonus or other promised bonus included in the package.
Weeks of pay in lieu of advance notice (e.g. WARN Act back pay, or a contractual notice period), paid at your weekly rate.
$
If provided, the result shows how many months your net severance would cover at this spending level -- a rough financial-runway indicator, not financial advice.
$
$
Enter what your severance offer actually says -- a dollar total, or a number of weeks -- and see how it compares to common informal norms.
Quick answer No -- severance pay is not required by law for most job separations in the United States. It's discretionary, based on your employer's policy, an individual contract, or a union agreement; the WARN Act requires advance notice (not severance) before certain large layoffs. A common informal market norm is 1–2 weeks of pay per year of service, but any figure -- including from this calculator -- is an estimate, not a legal entitlement.
$0Legal minimum for most US layoffs
1–2Weeks per year -- common informal norm
60 daysWARN Act notice period (not severance)
100+Employees -- typical WARN Act threshold
⚙️ Note: This tool performs simple arithmetic on the numbers and rate you choose (Weekly pay × Weeks); it is for informational purposes only and is not legal, tax, or financial advice. The United States has no statutory severance-pay formula. For your actual entitlement, review your offer letter, employment contract, or company policy, or consult an employment attorney.
💼 Severance Pay Calculator -- ToolPico ↗

Common scenarios

Severance pay in the US: what it is, and what it isn't

A plain-language guide to how severance actually works in the United States -- including where it's discretionary, where the WARN Act applies, and how it differs from unemployment insurance.

Severance pay is money (and sometimes other benefits) an employer chooses to give an employee whose job is ending -- typically in a layoff, a reduction in force, or a mutually agreed departure. Unlike some countries, where a statutory formula guarantees a payout for every qualifying employee, the United States has no general law requiring employers to provide severance pay. Most US jobs are "at-will," meaning either the employer or the employee can end the relationship at any time, for almost any reason, without a mandated payment. Whether you receive severance -- and how much -- comes down to your employer's own policy, an individual employment contract, a union collective-bargaining agreement, or simply what gets negotiated at the time. This calculator estimates a package based on common informal practice; it does not calculate a legal entitlement, because in most cases there isn't one.

Is severance pay legally required in the US?

Quick answerNo, not in general. There is no federal statute requiring most employers to pay severance when they lay off or terminate an employee. A minority of situations create an obligation: a written company severance policy (which can become an enforceable promise), an individual employment contract that specifies severance, a union contract, or in rare cases certain state or local rules. Absent one of those, severance is a business decision, not a legal one.

What is the WARN Act, and why isn't it the same as severance?

Quick answerThe federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more full-time employees to give 60 calendar days of advance written notice before a covered plant closing or mass layoff. If they don't, affected workers may be owed back pay and benefits for the notice period. That is a notice requirement with a back-pay remedy for violating it -- it is not a general severance mandate, it doesn't apply to most individual terminations, and it doesn't cover smaller employers or many routine layoffs.
  • Who it covers: employers with 100+ full-time employees, for covered plant closings or mass layoffs meeting size thresholds.
  • What it requires: 60 calendar days' advance written notice to affected employees (and often local government).
  • What it does not do: require any severance payment for compliant layoffs, or apply to most small businesses or single terminations.

What's a typical severance formula employers use?

Quick answerThere is no official formula, but the most common informal market norm is 1 to 2 weeks of pay per year of service for non-executive employees. Some employers offer more -- 3 to 4 or more weeks per year, or several months' salary as a lump sum -- especially for senior managers and executives. Some employers, particularly smaller companies or terminations for cause, offer none at all. Treat any "X weeks per year" figure, including this calculator's, as a benchmark against common practice, not a rulebook.

What actually determines whether -- and how much -- you get?

In practice, severance outcomes depend on a mix of factors: whether the company has a written severance plan or policy, your seniority and role, the size and financial condition of the employer, industry norms, whether the departure is a layoff versus a for-cause termination, local labor-market competition for talent, and whether the company wants a signed release of legal claims in exchange for the payment. Because none of these are set by federal law in the general case, two employees with similar tenure at different companies can receive very different outcomes.

Severance pay and taxes

Quick answerSeverance pay is taxable wages. It is subject to federal income tax withholding, Social Security and Medicare (FICA) taxes, and state income tax where applicable, and is reported on a W-2. It's commonly paid through regular payroll or as a lump sum taxed at supplemental wage rates -- either way, plan for taxes to be withheld, the same as from a normal paycheck.

Severance pay vs. unemployment insurance

Quick answerSeverance pay is a discretionary, employer-funded payment tied to your specific job separation. Unemployment insurance (UI) is a mandatory, state-run safety net funded by employer payroll taxes that pays eligible unemployed workers a weekly benefit for a limited time -- it exists whether or not you also received severance. The two are separate systems, but in some states the timing or structure of a severance payment can delay when UI benefits start or change the weekly amount, so check your state unemployment agency's rules for your specific payment.

How to negotiate a severance package

Because there's no fixed formula, severance offers are often negotiable -- particularly when the company is asking you to sign a release of legal claims in return. Before responding to an offer, research what's typical for your role, level, and industry; consider the whole package (health-insurance continuation, PTO payout, outplacement help, references, equity vesting) rather than just the headline dollar figure; and for higher-value or complicated offers, consider having an employment attorney review the agreement before you sign.

Severance pay reference tables

Illustrative examples only -- there is no official US severance schedule. Use the calculator above for your own numbers.

Illustrative severance estimates for a $60,000/year salary (≈ $1,154/week)
Years of serviceAt 1 week/yrAt 2 weeks/yr
1 year$1,154$2,308
3 years$3,462$6,924
5 years$5,769$11,538
10 years$11,538$23,077
15 years$17,308$34,615
20 years$23,077$46,154

Formula used: Weekly pay × (Years of service × Weeks per year). These are examples of common informal norms, not a legal schedule.

WARN Act (federal) -- key facts, not a severance requirement
ItemWARN Act rule
Employer size coveredGenerally 100+ full-time employees
Notice required60 calendar days, in writing
Typical triggersPlant closing; mass layoff meeting size thresholds
Does it require severance pay?No -- only advance notice
If notice isn't givenBack pay/benefits for the notice period may be owed
Common exclusionsSmall employers, single terminations, some unforeseeable circumstances

Simplified for general information; some states have their own "mini-WARN" laws with different thresholds. This is not legal advice.

Severance norms by role level (informal, highly variable)
Role levelTypical informal norm
Hourly / entry-levelOften none, or up to 1 wk/yr
Mid-level salaried1–2 weeks / year
Senior / manager2–3 weeks / year
Executive / VP+3–4+ weeks/year, or months of base pay

Ranges vary enormously by company, industry, and negotiation -- treat these as a starting benchmark only.

Shows whether your state taxes income (affects your net severance) and its own "mini-WARN" style notice law, if any.
All 50 states + DC -- income tax presence and mini-WARN notice laws (informal reference)
StateState income taxMini-WARN law

"Mini-WARN" refers to a state-level law that supplements or extends the federal WARN Act's notice requirements (different employer-size and notice-period thresholds by state). This table is a simplified starting reference, not legal advice -- state rules change, and thresholds/exceptions are more detailed than shown here. Always confirm with your state labor department or an employment attorney.

Add this calculator to your site (embed code)

Embed the severance pay calculator on your own website for free. Copy the code below into your HTML -- the tool runs in a simplified view and links back to this page as its source.

The embedded tool has a fixed layout; you can adjust the height value to fit your site. No ads or personal data, runs entirely client-side.

Severance & layoff terms glossary

Short definitions of the core terms used around US severance, layoffs, and unemployment.

Severance payA discretionary payment (or benefits) an employer offers an employee whose job is ending; not a general legal requirement in the US.
At-will employmentThe default US employment relationship: either side can end it at any time, for almost any lawful reason, without a mandated payout.
WARN ActFederal law requiring 60 days' advance notice (not severance) before certain large layoffs or plant closings at bigger employers.
Reduction in force (RIF)An employer-initiated elimination of positions, often for business or budget reasons rather than individual performance.
Severance agreement / releaseA document offered with severance pay, typically requiring the employee to waive the right to sue the employer over the employment or its end.
Unemployment insurance (UI)A mandatory, state-run program funded by employer payroll taxes that pays eligible unemployed workers weekly benefits for a limited period.
COBRA continuation coverageA federal right to keep employer-sponsored health insurance for a period after leaving a job, usually at your own cost unless the employer subsidizes it as part of severance.
Salary continuation vs. lump sumTwo common ways to pay severance: spread out like regular paychecks over weeks or months, or paid all at once.

In-depth guides

Longer explanations of the questions people most often get wrong about US severance.

Why isn't severance guaranteed in the US? (at-will employment, explained)

Most US states follow the doctrine of at-will employment: absent a specific exception, an employer can end the relationship at any time, for almost any reason (or no reason), without notice or payment, and an employee can quit the same way. Because there's no default legal entitlement to a payout on separation, severance only becomes an obligation when something specific creates one:

  • A written company severance policy or plan document that the employer has committed to follow.
  • An individual employment contract that specifies severance terms.
  • A union collective-bargaining agreement that includes severance provisions.
  • Certain state or local rules in specific circumstances (rare, and narrow in scope).
  • WARN Act back pay if an employer fails to give required advance notice of a covered mass layoff -- which compensates for missed notice, not severance itself.

Outside those situations, severance is a business choice a company makes to smooth a departure, maintain goodwill, or obtain a release of legal claims -- not something the law requires it to offer.

How the WARN Act notice requirement actually works

The WARN Act generally applies to employers with 100 or more full-time employees, and to layoffs that meet specific size thresholds (for example, a plant closing affecting 50 or more employees at a single site, or a mass layoff affecting a large share of the workforce). Covered employers must give 60 calendar days of advance written notice to affected employees before the layoff or closing takes effect.

If an employer fails to give the required notice, the remedy is typically back pay and benefits for the missed notice period -- not an open-ended severance payment. Many layoffs fall outside WARN entirely: smaller employers, layoffs below the size thresholds, and most individual terminations are not covered. Several states also have their own "mini-WARN" laws with different, sometimes stricter, thresholds -- check your state's rules if this applies to you.

How to think about a severance number when negotiating

Because there's no statutory formula, a "fair" severance offer is really a negotiation, not a calculation. Useful reference points: what's typical for your industry, role, and level (1–2 weeks per year of service is a common baseline for non-executive roles); how much leverage you have (for example, whether the company needs your signature on a release of claims to limit its legal risk); and what non-cash items might matter as much as the headline number -- continued health coverage (COBRA subsidy), payout of unused PTO, outplacement support, extended equity vesting, and the wording of any reference or non-disparagement clause.

For anything beyond a small, standard payout -- especially if you're being asked to release legal claims -- it's worth having an employment attorney review the offer before you sign.

Frequently asked questions

Is severance pay required by law in the United States?
No. Unlike some countries, the US has no federal law that requires employers to pay severance to most laid-off or terminated employees -- most US employment is at-will, meaning either side can end it without cause and without a mandated payout. Severance is offered at an employer's discretion, or because of an individual employment contract, a union agreement, or a written company policy. The one notable exception is the WARN Act, which requires advance notice (not severance pay) before certain large layoffs.
What is the WARN Act, and does it guarantee severance pay?
The Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more full-time employees to give 60 calendar days' advance written notice before a covered plant closing or mass layoff. If an employer fails to give proper notice, affected employees may be owed back pay and benefits for the notice period they should have received. That back-pay remedy is not the same as severance pay, and the WARN Act does not apply to most individual terminations, smaller employers, or many routine layoffs.
How much severance pay is typical in the US?
There is no legal formula, but a common informal market norm is 1 to 2 weeks of pay per year of service for non-executive roles. Senior managers and executives sometimes receive 3 to 4 or more weeks per year, or a lump sum equal to several months' salary. Many employers, especially smaller companies or terminations for cause, offer no severance at all. Any calculator figure -- including this one -- is an estimate against common practice, not a guaranteed amount.
Does every employee get severance when they are laid off?
No. Receiving severance after a layoff is not automatic in the US. It depends on whether your employer has a written severance policy, whether your individual contract or a union agreement addresses it, and sometimes on the size and circumstances of the layoff. Many employees who are laid off receive no severance, particularly at smaller companies or in at-will terminations without a specific policy in place.
Is severance pay taxable?
Yes. Severance pay is treated as wages by the IRS and is subject to federal income tax withholding, Social Security and Medicare (FICA) taxes, and applicable state income tax. It is commonly paid either through regular payroll (taxed like a normal paycheck) or as a supplemental wage payment, and it is reported on a W-2, not a 1099.
Does severance pay affect unemployment insurance benefits?
It can, and the rules vary significantly by state. In some states a lump-sum severance payment does not delay unemployment benefits, while in others severance paid as continued salary can push back the date benefits start, or reduce the weekly amount. Because unemployment insurance is administered at the state level, check with your state's unemployment agency about how your specific severance payment will be treated.
Can I negotiate my severance package?
Often, yes. Since severance is discretionary rather than a fixed legal amount, there is frequently room to negotiate the number of weeks, the timing of payment, continued health coverage, accrued vacation payout, or references -- especially when the company is asking you to sign a release of legal claims in exchange for the severance. For higher-value packages or complex situations, consider having an employment attorney review the offer.
What is usually included in a US severance package besides pay?
Beyond a lump sum or continued salary, severance packages can include continued health insurance (often a period of employer-subsidized COBRA coverage), payout of unused accrued vacation or PTO, outplacement or job-search assistance, extended vesting or exercise windows for stock options, and sometimes a neutral employment reference. What is included is entirely up to the employer and what is negotiated.
What is the difference between severance pay and unemployment insurance?
Severance pay is a discretionary, employer-paid amount tied to your job separation, with no general legal requirement to provide it. Unemployment insurance (UI) is a mandatory, state-run program funded by employer payroll taxes that pays eligible unemployed workers a weekly benefit for a limited time, regardless of whether they also received severance -- though the timing or size of severance can affect when UI benefits begin in some states.
Does signing a severance agreement waive my legal rights?
Usually, yes. In exchange for severance pay, employers typically require employees to sign a severance agreement that includes a release of legal claims -- meaning you agree not to sue the company over your employment or termination. These agreements can also include non-disparagement or confidentiality clauses. Read any severance agreement carefully, and consider having an employment attorney review it before signing, particularly for larger packages.
How much of my severance pay will I actually take home after taxes?
Less than the gross (pre-tax) amount. The IRS commonly treats severance as a supplemental wage subject to a flat 22% federal withholding rate (this calculator's default), plus Social Security and Medicare (FICA) taxes of about 7.65%, plus state income tax where applicable -- some states, such as Florida, Texas, and Washington, have no state income tax, while most others do (see the state reference table above). Your actual take-home amount and final tax liability depend on your total annual income, W-4 elections, and state of residence, so treat any net estimate as approximate, not tax advice.

Methodology & sources

ToolPico's Severance Pay Calculator is a free, independent estimator, not a legal or tax calculation engine. The "Estimate severance" mode computes Weekly pay × (Years of service × Weeks per year), optionally capped at a maximum number of weeks you specify. The "Check my offer" mode converts your stated offer to an equivalent weeks-per-year-of-service ratio (Offered weeks ÷ Years of service) and compares it against commonly cited informal norms (roughly 1–2 weeks per year for non-executive roles). Both modes run entirely client-side (in your browser); no data is sent to a server.

Legal basis: There is no federal or general state statute mandating severance pay for most US job separations; the tool's disclosures about the WARN Act reflect the federal Worker Adjustment and Retraining Notification Act's notice requirements, which are separate from severance pay. Last updated: July 21, 2026. Results are estimates for informational purposes only and do not constitute legal, tax, or financial advice; for your actual entitlement, consult your employment contract, company policy, or a qualified employment attorney.

🔗 Add this tool to your site

Copy the code below into your own site. The tool is free, always up to date, and runs entirely on your page. No sign-up required.

Preview →
⚡ Built with ToolPico · toolpico.com