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 Virginia?

Yes. Virginia withholds a flat 5.75% on severance (its supplemental rate, equal to the top bracket that starts at $17,000), plus federal 22% supplemental withholding, Social Security, and Medicare — roughly 35% total on a typical package. No local income taxes apply.

Does Virginia have a WARN Act?

No state version. The federal WARN Act applies to Virginia employers with 100+ full-time employees: 60 days' notice before mass layoffs or closings. Contract-loss layoffs at large contractors can still trigger it — the exceptions are narrower than often claimed.

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

It depends on how the severance is structured. Week-allocated severance is offset dollar-for-dollar against VEC benefits for those weeks; an unallocated lump sum generally affects only the week it's received. File immediately and describe the payment structure exactly as your agreement states it.

Severance Pay Calculator for Virginia (2026)

Severance Pay Calculator — Virginia

Virginia doesn't require severance pay and relies on the federal WARN Act for layoff notice, so the state-specific facts come down to two things: severance is withheld at Virginia's 5.75% supplemental rate, and the Virginia Employment Commission offsets severance that's allocated to specific weeks against your unemployment benefits.

Run your package below with 5.75% as the state rate. If you're negotiating, note that in Virginia a lump sum without week-by-week allocation is usually the friendlier structure for your unemployment claim — worth raising before you sign.

How Virginia taxes severance

Virginia withholds a flat 5.75% on supplemental wages like severance — the same as its top bracket, which starts at only $17,000 of taxable income, so effectively all severance is taxed at that rate. Add the federal 22% supplemental withholding, Social Security, and Medicare, and a typical Virginia package sees about 35% withheld. Virginia has no local income taxes to add.

Layoff notice in Virginia: federal WARN only

Virginia has no state mini-WARN law; the federal WARN Act governs: employers with 100+ full-time employees must give 60 days' written notice before a plant closing or mass layoff of 50+ workers at a single site. Given the density of large federal contractors in Northern Virginia, contract-loss layoffs sometimes raise genuine WARN questions — the 'unforeseeable business circumstances' exception is narrower than employers imply, and WARN back pay is separate from severance.

Severance and unemployment benefits in Virginia

The Virginia Employment Commission offsets severance against benefits when the employer allocates it to specific weeks: for those weeks, benefits are reduced dollar-for-dollar, and if the weekly severance meets or exceeds your weekly benefit amount you receive nothing until the allocation ends. Severance paid as a single unallocated lump sum is generally treated as affecting only the week it's paid. Report the structure of your package precisely when you file — and file the week you're laid off.

Severance Pay Calculator — Virginia

How Virginia taxes severance

Layoff notice in Virginia: federal WARN only

Severance and unemployment benefits in Virginia

Severance questions in Virginia

Severance calculators for other states