How is severance pay calculated?

Most U.S. severance packages use a simple formula: a number of weeks of pay for every year of service — typically one to two weeks per year, sometimes capped at a maximum (for example 26 weeks). Example: $85,000 salary is about $1,635/week; with 5 years of service at 2 weeks per year, that's 10 weeks, or roughly $16,350 gross. Senior roles and negotiated agreements can be higher. The SeveranceWorth calculator lets you plug in your own salary, tenure, and policy.

Is severance pay taxed like a bonus?

Yes. The IRS treats severance as 'supplemental wages', the same category as bonuses. When paid separately from regular wages, employers typically withhold a flat 22% for federal income tax (37% on any amount over $1 million), plus Social Security (6.2% up to the annual wage base) and Medicare (1.45%), plus any state income tax. Withholding is not your final tax bill — your actual tax is settled when you file your return.

Can I collect unemployment benefits and severance at the same time?

It depends on your state and on how the severance is paid. In many states a one-time lump sum does not block unemployment benefits, while 'salary continuation' severance (staying on payroll for X weeks) can delay eligibility until the payments end. Some states reduce benefits dollar-for-dollar during the severance period. File for unemployment right away regardless — your state agency will tell you when benefits start.

Is my employer required to pay severance?

In most cases, no. U.S. federal law (the FLSA) does not require severance pay. You are generally entitled to it only if your employment contract or offer letter promises it, the company has an established written severance policy, a union agreement covers it, or it is offered in exchange for signing a release of claims. Employers do owe your final paycheck and accrued PTO where state law requires it.

What is the WARN Act?

The federal WARN Act requires employers with 100 or more full-time employees to give 60 days' written notice before a mass layoff or plant closing. If proper notice isn't given, affected workers may be entitled to up to 60 days of back pay and benefits. Several states (like California and New York) have stricter 'mini-WARN' laws covering smaller employers. WARN pay is separate from — and can be in addition to — severance.

How much does COBRA cost per month?

Under COBRA you pay the entire premium — the share you paid as an employee plus everything your employer was covering — plus an administrative fee of up to 2%. Because employers typically cover 70–80% of the premium, COBRA often costs 4–5x what came out of your paycheck: commonly $600–$800+/month for individual coverage and $1,800–$2,400+/month for family coverage. Always compare against ACA marketplace plans at healthcare.gov before electing.

Can I negotiate my severance package?

Often, yes — especially when you're asked to sign a release of legal claims, which is what the company is paying for. You can ask for more weeks of pay, payment of your COBRA premiums for several months, an extended exercise window on stock options, vesting of near-term equity, a neutral reference, and outplacement support. You typically have at least 21 days to consider a release if you're over 40 (ADEA), so don't sign on the spot.

Does SeveranceWorth store my salary information?

No. Every calculator runs entirely in your browser. The numbers you type — salary, savings, expenses, premiums — are never transmitted, stored, or seen by anyone. There is no backend, no database, and no account. Refresh the page and everything is gone.

Is severance taxed in Georgia?

Yes — at Georgia's flat rate, 5.19% for 2026 (scheduled to keep stepping down toward 4.99%), plus the federal 22% supplemental withholding, Social Security, and Medicare. Total withholding on a typical package runs around 35%.

Does Georgia have a WARN Act?

No state version. Only the federal WARN Act applies — 100+ employee companies owe 60 days' notice before mass layoffs or plant closings. Smaller Georgia employers have no advance-notice requirement.

Can I get unemployment and severance at the same time in Georgia?

It depends on allocation. A lump sum not tied to specific weeks generally doesn't block Georgia benefits; severance the employer allocates to particular weeks can delay benefits until those weeks pass. File with the GDOL immediately and report the severance exactly as your agreement describes it.

Severance Pay Calculator for Georgia (2026)

Severance Pay Calculator — Georgia

Georgia doesn't require severance pay and has no state layoff-notice law, so a Georgia layoff runs on the federal baseline — with two local details that matter for your math: the state's flat income tax (5.19% for 2026, on a scheduled path down toward 4.99%) and a Department of Labor that looks at how your employer allocates severance when deciding when unemployment benefits start.

Run your numbers below with 5.19% as the state rate. If your agreement spreads severance across specific weeks rather than paying a lump sum, read the unemployment section before assuming benefits start immediately.

How Georgia taxes severance

Georgia moved to a flat income tax in 2024 and is stepping the rate down annually — 5.19% for 2026, headed toward a floor of 4.99% — and severance is withheld at that flat rate alongside the federal 22% supplemental rate, Social Security, and Medicare. The declining schedule means a package paid in January can be taxed slightly differently than one paid the previous December.

Layoff notice in Georgia: federal WARN only

Georgia has no state mini-WARN law. The federal WARN Act is the only notice requirement: employers with 100+ full-time employees must give 60 days' written notice before a plant closing or a mass layoff of 50+ at a single site. Smaller Georgia employers can lay off without any advance-notice obligation — which makes the severance agreement itself the main thing you can negotiate.

Severance and unemployment benefits in Georgia

In Georgia, the effect of severance on unemployment depends on how the employer reports it. A lump-sum payment not allocated to specific weeks generally doesn't block benefits, but severance the employer allocates to particular weeks after separation can make you ineligible for those weeks, with benefits starting after the allocation ends. The GDOL asks about severance on every claim — answer precisely, file the week you're laid off, and let the department apply its allocation rules.

Severance Pay Calculator — Georgia

How Georgia taxes severance

Layoff notice in Georgia: federal WARN only

Severance and unemployment benefits in Georgia

Severance questions in Georgia

Severance calculators for other states