Severance Pay Calculator 2026
Estimate what a severance package is worth before and after tax. Enter weekly pay, years of service, and the employer’s weeks-per-year formula to see the gross amount, the 22% federal supplemental withholding, Social Security and Medicare, and the net that actually lands in your account.
Works offline — your inputs never leave this device. How that works
Withholding is a prepayment, not the final tax. If 22% is more than your actual rate, the difference comes back as a refund; if it is less, the balance is due at filing.
Verified 2026-07-31 against Publication 15 (2026), (Circular E), Employer's Tax Guide (effective 2026-01-01)
Estimate only — not legal, tax, or financial advice. Only IRS can determine your actual amounts.
Official source: IRS Publication 15 — supplemental wages ↗
🎓 Understand this tool
What it is
An estimator for what a severance package is worth — the gross amount an employer formula produces, and the smaller number that actually reaches your bank account after federal withholding, Social Security, and Medicare come out.
How it works
Severance is supplemental wages under IRS Publication 15. Paid separately from regular wages, it is commonly withheld at the flat 22% supplemental rate, rising to 37% on supplemental wages above $1 million in a calendar year. Social Security applies at 6.2% until your year-to-date wages reach the $184,500 wage base; Medicare applies at 1.45% with no cap, plus 0.9% above $200,000.
Getting the most from it
- Enter your usual weekly gross pay — annual salary divided by 52 works.
- Enter years of service and the weeks-per-year figure from the policy or offer letter.
- Add any flat weeks the package includes, and a cap if the policy has one.
- Enter wages already paid this year so the Social Security wage base is applied correctly.
- Open the step-by-step math to see which rate applied to which portion.
Reading your result
The headline figure is net after withholding, not final tax. Withholding is a prepayment: if the flat 22% exceeds your actual marginal rate, the difference returns as a refund, and if it falls short the balance is due when you file. Compare packages on the gross-and-net pair rather than on weeks alone.
What it can't tell you
This models the common flat-rate method for a separately paid lump sum. Employers may instead use the aggregate method, which withholds as though the payment were ordinary wages, and state rules vary. It cannot see plan-specific deductions, deferred compensation, or how a payment is allocated across weeks for unemployment purposes.
Frequently asked questions
Severance is supplemental wages. Paid separately from regular pay, employers commonly withhold federal income tax at the flat 22% supplemental rate (37% on amounts over $1 million in a calendar year), plus Social Security up to the $184,500 wage base and uncapped Medicare. Withholding is not the final tax — your return reconciles it.
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