Severance Pay Calculator United States

What the severance pay calculator does

The calculator estimates the size of a severance package and what you keep after tax. Enter your weekly pay (usually your regular gross salary divided into weeks) and the number of weeks offered, and it returns the gross amount and the take-home figure after federal withholding, Social Security, Medicare and any state income tax you enter.

A separation agreement shows a gross number, and the deposit is often noticeably smaller. The net figure is the one to budget around while you look for your next role.

How severance is built

Most packages are expressed as weeks of pay, often tied to years of service, for example one or two weeks per year worked, though the formula varies by employer and can be negotiated. Because you enter the weekly pay and number of weeks directly, the calculator works with any formula.

You can also add a lump sum for any extra payment in the package, such as a pro-rated bonus or a payment for unused benefits.

How severance is taxed

Severance is treated as supplemental wages, not regular wages, which changes how federal income tax is withheld. Employers commonly apply a flat federal withholding rate instead of the graduated tables used for a normal paycheck. A separate, higher flat rate applies to supplemental wages above a very high annual threshold, and the calculator applies it to large packages. This is withholding, not your final tax; your actual liability depends on your total income for the year and is settled when you file.

Severance is also generally subject to FICA. Social Security applies to wages up to the annual wage base; if you have already earned close to that base this year, enter your year-to-date Social Security wages so the tool applies Social Security only to the amount still below it. Medicare applies to all covered wages with no cap.

Most states with an income tax also withhold from severance. State rules vary widely, so you enter your state rate.

How the calculation works

• It multiplies your weeks of severance by your weekly pay and adds any extra lump sum to find the gross package.
• It applies the flat federal supplemental withholding rate, using the higher rate only on any portion above the annual cap.
• It adds Social Security up to the remaining wage base and Medicare on the full amount.
• It adds state tax at the rate you enter.
• It subtracts the total withholding from the gross to show your net severance.

The rates, wage base and supplemental cap are stored as parameters and updated when the IRS and SSA publish new annual figures.

Reading your result

The output separates federal withholding, FICA and state tax, then shows your net severance and the effective withholding rate. The split shows where the reduction comes from, which helps when the flat supplemental rate makes the federal share look larger than expected.

The flat rate is rarely your exact marginal rate. If it is higher than your true rate for the year, you may get some back as a refund when you file; if it is lower, you may owe more. Treat the net figure as a planning estimate, revisit it as your situation changes, and confirm specifics with a tax professional.

This is general information only and not financial or tax advice.

About This Severance Pay Calculator

Use this severance pay calculator to get an instant, accurate estimate. The figures follow official IRS guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.