Severance Pay Calculator 2026 — Know Exactly What You're Owed

Just got laid off? Most employees sign their severance agreement without verifying if the number is correct. This calculator shows you the complete breakdown — gross severance, tax deduction, PTO payout, and notice pay — in under 60 seconds.

How to Use This Calculator

  1. Monthly Salary: Your gross salary before taxes
  2. Years of Service: Total years at this employer (use decimals: 3.5)
  3. State: Affects tax and PTO rules
  4. Unused PTO Days: Accrued paid time off remaining
  5. Notice Period: Weeks employer pays in lieu of working
  6. Click Calculate — instant itemized result

📐 Formula

Weekly Salary = Monthly × 12 ÷ 52 Gross Severance = Weekly × Years of Service Federal Tax (22%) = Gross × 0.22 Net Severance = Gross − Tax PTO Pay = (Monthly ÷ 22 days) × PTO Days Notice Pay = Weekly × Notice Weeks ────────────────────────────────────── TOTAL PAYOUT = Net + PTO Pay + Notice Pay

📌 Real Example — Sarah, Texas, 6 Years of Service

Monthly: $7,500 | Years: 6 | PTO: 12 days | Notice: 2 weeks

  • Weekly: $7,500 × 12 ÷ 52 = $1,731
  • Gross: $1,731 × 6 = $10,384
  • Tax (22%): −$2,285
  • Net Severance: $8,100
  • PTO Pay: (7,500÷22)×12 = $4,090
  • Notice Pay: $1,731×2 = $3,462
  • Total: $15,652

What Does USA Law Require?

Federal law (FLSA) does not require severance pay. However, the WARN Act requires 60 days' notice or pay for companies with 60+ employees doing mass layoffs. Your employment contract or company policy may also create a legal obligation.

Severance is taxed as supplemental wages — flat 22% federal rate. No state income tax in Texas or Florida. California can be up to 13.3%.

Always negotiate. Employers expect it. Counter-offer for more weeks, extended health insurance, equity vesting, or a mutual non-disparagement clause.

Frequently Asked Questions

Is severance pay required by law in the USA?+
Federal law (FLSA) does not require it. But the WARN Act, your employment contract, or company handbook may create an obligation. Always check your offer letter before assuming you have no rights.
How is severance pay taxed?+
The IRS treats severance as supplemental wages — flat 22% federal withholding for amounts under $1 million. State income tax may also apply. Texas and Florida have no state income tax. Our calculator shows your net amount after 22% federal tax.
How much severance per year of service?+
Standard USA formula: 1 week of salary per year of service. Some companies offer 2 weeks/year for senior employees. Example: 5 years at $1,000/week = $5,000 gross severance before tax.
Can I negotiate my severance package?+
Yes — and you should. Never sign immediately. Counter-offer for more weeks of pay, extended health coverage, outplacement services, or better non-disparagement terms. Knowing your calculated number gives you leverage.
Does unused PTO have to be paid out?+
California, Colorado, and Montana require all accrued PTO to be paid out on termination. Most other states follow company policy. Check your employee handbook and your state's Department of Labor website.
💼 Severance Pay Calculator
Total Estimated Payout
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Gross Severance
Federal Tax (22%)
Net Severance
Unused PTO Pay
Notice Period Pay

⚠️ Estimate only. Consult an employment attorney for your specific situation.

✅ Why Trust This Calculator?
  • USA 2026 federal formulas
  • No login or signup needed
  • Your data is never stored
  • Results shown instantly