Severance Calculator 2025

Calculate severance pay, unemployment benefits, and total severance packages with COBRA continuation coverage, vacation payout, and tax implications. Includes comprehensive analysis for layoffs, terminations, and voluntary separations with accurate benefit calculations.

Calculate Severance View Severance Info

Severance Calculator

Calculate severance pay, unemployment benefits, and total package value with tax implications

Severance Types & Benefits (2025)

Severance Pay Types

Standard Severance
1-2 weeks/year

Most common severance formula

Enhanced Severance
3-4 weeks/year

Senior positions or mass layoffs

Executive Severance
6-12 months

C-level and VP positions

Minimum Severance
2-4 weeks

Entry level or short tenure

Benefits Continuation

COBRA Health Insurance
18-36 months

Continued health coverage option

Employer-Paid COBRA
3-6 months

Company pays COBRA premiums

Life Insurance
30-60 days

Temporary continuation coverage

Outplacement Services
3-12 months

Career transition assistance

Unemployment Benefits (2025)

Maximum Weekly Benefit
$450-$823

Varies by state (CA: $450, NY: $504)

Benefit Duration
12-26 weeks

Standard unemployment period

Extended Benefits
13-20 weeks

During high unemployment periods

Waiting Period
1-2 weeks

Before benefits begin

Tax Implications (2025)

Federal Income Tax

Severance pay is subject to federal income tax withholding at regular rates or supplemental wage rates (22% for amounts under $1 million). May be subject to higher withholding depending on amount.

FICA Taxes

Severance is subject to Social Security (6.2% up to wage base) and Medicare (1.45% plus 0.9% additional for high earners) taxes, same as regular wages.

State Taxes

State income tax withholding varies by state. Some states have specific severance withholding rates, while others treat it as regular income.

Unemployment Impact

Severance payments may delay unemployment benefits depending on state rules. Some states reduce benefits dollar-for-dollar, others have different formulas.

Severance Calculation Examples (2025)

Mid-Level Manager

Position: Operations Manager

Annual Salary: $95,000

Years of Service: 8 years

Severance Formula: 2 weeks per year

Severance Package Breakdown
Weekly Salary $1,827
Severance Weeks (8 × 2) 16 weeks
Gross Severance Pay $29,231
Vacation Payout (3 weeks) $5,481
COBRA (6 months paid) $3,600
Total Package Value $38,312
Net After Taxes $26,818

Senior Executive

Position: VP of Sales

Annual Salary: $185,000

Years of Service: 12 years

Severance: 6 months guaranteed

Executive Severance Package
6 Months Salary $92,500
Vacation Payout (4 weeks) $14,231
COBRA (12 months paid) $7,200
Outplacement Services $15,000
Non-compete Payment $25,000
Total Package Value $153,931
Net After Taxes $98,516

Mass Layoff

Position: Software Developer

Annual Salary: $78,000

Years of Service: 3 years

WARN Act: 60-day notice required

WARN Act Severance
WARN Pay (60 days) $12,000
Additional Severance (6 weeks) $9,000
Vacation Payout (2 weeks) $3,000
COBRA (3 months paid) $1,800
Unemployment Benefits (26 weeks) $11,700
Total Support Value $37,500
Net Income Support $28,125

Entry Level Employee

Position: Junior Analyst

Annual Salary: $52,000

Years of Service: 1.5 years

Severance: Minimum package

Entry Level Severance
Minimum Severance (4 weeks) $4,000
Vacation Payout (1 week) $1,000
COBRA (1 month paid) $600
Job Search Assistance $2,000
Unemployment Benefits (26 weeks) $9,100
Total Support Value $16,700
Net Income Support $13,360

Frequently Asked Questions About Severance Pay

There's no federal law requiring severance pay. Most companies offer 1-2 weeks per year of service, but this varies by company policy, position level, and circumstances. Executive positions often receive 6-12 months of severance.

Yes, severance pay is taxable income subject to federal income tax, state tax (where applicable), Social Security, and Medicare taxes. It's typically withheld at supplemental wage rates (22% federal for amounts under $1 million).

This depends on your state's rules. Some states delay unemployment benefits until severance payments end, while others reduce benefits dollar-for-dollar. Check with your state's unemployment office for specific rules.

Consider negotiating: severance amount, COBRA payment duration, outplacement services, positive reference letters, non-compete modifications, and timing of payments. Always review agreements carefully before signing.

Important Severance Information

Severance calculations vary significantly by company policy, employment agreements, state laws, and individual circumstances. This calculator provides estimates based on common severance practices and should not be considered as guaranteed entitlements. Actual severance packages may include additional benefits, restrictions, or requirements such as non-compete agreements, non-disclosure agreements, or release of claims. Severance payments are subject to federal and state income taxes and may affect unemployment benefit eligibility. Employees should carefully review severance agreements and consult with employment attorneys or financial advisors before accepting severance packages. COBRA and unemployment benefit rules vary by state and individual circumstances.