Estimate your severance package value based on years of service, salary, and company policy. Know what to expect before negotiating.
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A mid-level software engineer in Austin, TX is comparing a $130,000 W-2 offer against their current $115,000 role. The new offer includes a $10,000 signing bonus and 0.1% equity in a Series B company.
Takeaway: Texas has no state income tax, which inflates take-home vs. the same offer in California (~9.3% marginal) or New York (~6.85%). Run the comparison with your state's rate above.
Take-home calculators estimate withholding based on single/married status and claimed allowances. If you have side income, multiple jobs, or itemized deductions, your actual withholding will differ. The IRS Tax Withholding Estimator is the most accurate tool for W-4 calibration.
Nine states have no income tax (TX, FL, WA, NV, AK, SD, WY, TN, NH). California tops out at 13.3% marginal. State tax can shift your net paycheck by $200-$1,000/month on a $100K salary. Always select your state before reading take-home results.
Cost of Living Salary AdjustmentEmployer-paid health insurance, 401(k) match, HSA contributions, and paid leave have real dollar value — typically $8,000-$25,000/year for a mid-career employee. Comparing two offers on base salary alone ignores a major component of total compensation.
Benefits Value CalculatorW-2 employees pay 7.65% FICA (SS + Medicare); employers match it invisibly. 1099 contractors pay the full 15.3% self-employment tax. A $100K 1099 contract has roughly $7,650 more tax friction than a $100K W-2 salary before any other adjustments.
1099 vs W-2 Tax ComparisonBonuses are withheld at a flat 22% federal supplemental rate (or 37% over $1M) — not your effective rate. Your actual tax on the bonus is determined at year-end filing. If your marginal rate is below 22%, you'll get a refund; above, you may owe.
Bonus Tax CalculatorBased on your inputs
10 weeks of pay + PTO
| Weekly Pay | $1,538.46 |
|---|---|
| Severance Weeks | 10 weeks |
| Severance Pay | $15,384.62 |
| Unused PTO Payout | $3,076.92 |
| Total Package (gross) | $18,461.54 |
| Est. After-Tax (28% rate) | $13,292.31 |
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Most companies offer 1–2 weeks of pay per year of service. Some executive packages offer 1 month per year.
Yes, severance pay is taxable income. It is subject to federal and state income tax, Social Security, and Medicare taxes.
Yes. Severance is often negotiable, especially for longer-tenured employees or those in senior roles. Consider consulting an employment attorney.
Severance typically includes base pay continuation, health insurance (COBRA), outplacement services, and sometimes accelerated vesting of equity.
Severance duration varies from 2 weeks to 12 months depending on tenure and seniority. Most employees receive 1 to 2 weeks per year of service, while executives may negotiate 6 to 24 months of continued pay.
It depends on your state. Some states allow simultaneous collection while others delay unemployment benefits until severance ends. Lump-sum severance payments are treated differently than continued salary payments.
Beyond base pay, negotiate extended health insurance coverage, accelerated equity vesting, outplacement services, a neutral reference letter, non-disparagement clauses, and removal of non-compete restrictions.
Severance is taxed as supplemental wages at a flat 22 percent federal withholding rate for amounts under one million dollars. State taxes also apply, and the total tax impact depends on your annual income level.
The US has no federal law requiring severance pay. It is typically offered as a company policy or negotiated individually. Some employment contracts and collective bargaining agreements may guarantee severance benefits.
No. You typically have 21 days to review the agreement and 7 days to revoke after signing. Consult an employment attorney to understand what rights you may be waiving, especially regarding legal claims.
Severance = (Annual Salary ÷ 52) × (Years × Weeks/Year)
PTO Payout = (Annual Salary ÷ Work Days) × Unused PTO
Total Package = Severance + PTO Payout
Every formula on this page traces to a federal agency, central bank, or peer-reviewed institution. We cite the rule-makers, not secondhand blogs.
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Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.