US severance paycheck calculator
Already have a severance offer? Estimate federal withholding, Social Security, Medicare and the payment that may reach your account. This does not calculate what your employer owes you.
See what may reach your account
Enter the cash offer and all three year-to-date wage figures. Enter zero where none has been paid.
2026 withholding rules used
These are payroll-withholding rules from IRS Publication 15 and the Social Security Administration. They estimate the check, not your final income-tax liability.
| Withholding item | Rate | How it applies |
|---|---|---|
| Optional flat federal withholding | 22% | Through $1,000,000 of employer-paid supplemental wages |
| Federal rate above the supplemental-wage threshold | 37% | Only the portion above $1,000,000 |
| Employee Social Security | 6.2% | Up to the $184,500 wage base |
| Employee Medicare | 1.45% | No wage cap |
| Additional Medicare payroll withholding | 0.9% | On employer-paid Medicare wages above $200,000 |
Methodology, coverage and public sourcesFederal withholding + FICA · State tax not estimated · Entitlement and WARN rights excluded
Coverage and assumptions
- •This estimates withholding on cash severance an employer has already offered. It does not calculate whether severance is owed or how large an offer should be.
- •There is no general federal tax-free allowance for severance. The full cash offer is treated as supplemental wages.
- •The optional flat method is calculated only when the user confirms that payroll will separately identify the severance and use that method. Otherwise federal withholding and net payment are not estimated.
- •The optional flat federal rate is 22% through $1 million of supplemental wages paid by the employer during the calendar year; the portion above $1 million is withheld at 37%.
- •Employee Social Security is 6.2% up to the 2026 wage base. The user must enter Social Security wages already paid by this employer.
- •Employee Medicare is 1.45% with no wage cap. Payroll withholds an additional 0.9% once Medicare wages paid by the employer exceed $200,000 in the calendar year.
- •State and local withholding is not calculated. Only an amount entered from an employer or payroll estimate is included.
- •Withholding is not final tax liability. Filing status, other income, deductions, credits and state rules can change the amount ultimately owed or refunded.
- •Federal WARN back-pay remedies and state-law rights, including New Jersey WARN, are outside this calculator. Employer payroll taxes and FUTA are also excluded.
- •Estimate for W-2 employees and guidance only, not legal or tax advice.
Public sources
Rates are for calendar year 2026. Every calculated federal number traces to these public authorities.
- IRS
Publication 15 (2026): severance is supplemental wages; optional 22% flat withholding, mandatory 37% on supplemental wages above $1 million, and employee Social Security and Medicare rules.
https://www.irs.gov/publications/p15
- Social Security Administration
2026 Social Security employee rate of 6.2% and taxable wage base of $184,500; Medicare rate of 1.45% with no wage cap.
https://www.ssa.gov/oact/cola/cbb.html
- U.S. Department of Labor
The FLSA does not require severance pay; severance is generally a matter of agreement between employer and employee.
https://webapps.dol.gov/elaws/faq/esa/flsa/007.htm
- U.S. Department of Labor
Federal WARN concerns notice and back-pay remedies; this calculator does not calculate WARN rights or damages.
https://webapps.dol.gov/elaws/eta/warn/faqs.asp
US severance taxes, answered
Does the United States have a tax-free severance allowance?
No general federal tax-free allowance is applied. The IRS lists severance as supplemental wages, so this calculator treats the full cash offer as wages for withholding.
Why might the calculator use 22% federal withholding?
When severance is separately identified and payroll uses the optional flat supplemental-wage method, the published rate is 22% through $1,000,000 of supplemental wages paid during the calendar year. The portion above that threshold is withheld at 37%.
What if payroll uses the aggregate method?
The aggregate method depends on regular wages, the payroll period and Form W-4 information. Select it and the calculator will show Social Security and Medicare, but it will not invent federal withholding or a final net payment.
Does this tell me how much severance I am owed?
No. The Department of Labor says the FLSA does not require severance pay; it is generally a matter of agreement. Federal WARN back-pay remedies and state-law rights, including New Jersey WARN, are outside this calculator.
Does the calculator estimate state tax?
No. State and local rules vary, and this version does not invent a rate. If payroll gives you an estimated state and local withholding amount, enter it and the calculator will include it.
Is the estimated withholding my final tax bill?
No. Payroll withholding is a prepayment. Filing status, other income, deductions, credits and state rules determine whether you eventually owe more or receive a refund.
Comparing the severance check with pay from a new role? Use the US take-home pay calculator for an annual salary estimate.