Severance & Layoff Calculator

How to Use This Calculator

1. Enter your salary and tenure — your annual salary and years of service.
2. Enter the severance offered — the number of weeks from your offer letter.
3. Add your safety net — current savings and monthly essential expenses.
4. Read your real runway — net severance after withholding, and how many months it buys you.

Why the Number on the Offer Letter Isn't What You'll See

A severance offer is usually stated as a number of weeks of pay, but the check that actually arrives is smaller than that gross figure — employers are required to withhold severance at a flat 22% federal rate as a "supplemental wage," separate from however your regular paycheck is normally withheld, plus standard FICA taxes. That's a withholding rate, not necessarily your true tax bill: it gets reconciled with everything else on your return at tax time.

What actually matters after a layoff isn't the gross number on the letter — it's how many months that net amount, combined with whatever you already have saved, can realistically cover your essential expenses while you search for the next role.

After the Runway Number: What Comes Next

If your runway looks shorter than you'd like, our Emergency Fund Calculator can help you set a target for what to rebuild toward once you're working again. And logging your job-search-period spending in the Budget Tracker makes it obvious in real time if your actual burn rate is running faster than this estimate assumed.

Frequently Asked Questions

Why is my severance check smaller than my salary would suggest?

Employers withhold severance as a "supplemental wage" at a flat 22% federal rate (up to $1 million in supplemental wages per year), plus the usual 6.2% Social Security and 1.45% Medicare — regardless of your normal paycheck withholding. That 22% is a withholding rate, not necessarily your final tax rate: depending on your total income for the year, you could get some of it back as a refund, or owe more when you file.

How many weeks of severance should I expect?

There's no federal law requiring severance pay in most layoffs (the WARN Act requires advance notice for larger layoffs, not severance itself). Common offers range from 1 to 4 weeks of pay per year of service, with 2 weeks/year being a frequently cited average — but this varies enormously by company, role, and negotiating leverage. Treat any formula as a starting point for negotiation, not a guarantee.

Does severance pay affect unemployment benefits?

It depends on your state. Some states delay unemployment benefits until your severance period ends (treating it as continued wages), while others let the two run concurrently. Rules vary enough that this calculator doesn't attempt to model it — check with your state's unemployment office before assuming either way.

Should I count on the exact number of months this shows?

Treat it as a planning estimate, not a guarantee. It assumes your net severance and current savings only need to cover essential expenses (not discretionary spending), and it doesn't model COBRA health insurance costs, which are often one of the biggest new expenses after a layoff — build those into your monthly essential-expenses number if they apply to you.

What should I do first if I'm negotiating a severance offer?

Before signing anything, run the numbers here to see your real runway, then check whether the offer includes continued health coverage, unused PTO payout, and outplacement support — those can be worth as much as extra weeks of pay. Many offers have room to negotiate, especially around the release-of-claims timeline; a formal review from an employment attorney is worth it for a package with legal language you don't fully understand.

Related Calculators