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Severance Package Calculator

Size a severance package from years of service, estimate federal withholding and take-home, and see how many months it covers against your expenses and COBRA.

Quick answer: Size a severance package from years of service, estimate federal withholding and take-home, and see how many months it covers against your expenses and COBRA. Enter Annual Salary, Years of Service, Weeks of Pay per Year of Service, and Monthly Essential Expenses to personalize the estimate. It returns Gross Severance so you can compare the impact before choosing a next step. Use it to compare cash flow, interest, liquidity, and next-account choices before moving money.

SWReviewed by SwitchWize Research Desk · Last reviewed September 8, 2026
Gross Severance
$13,846
Gross Severance
$13,846
Gross Severance
$13,846
Package Size
Gross severance (8.0 weeks)
$14K
Estimated net severance
$10K
Federal withholding (22%/37% supplemental rate)$3K
FICA (Social Security + Medicare)$1K
Reserve-vs-withholding difference at 24%$277

This severance covers about 2.4 months of expenses, which is 2.6 months short of your expected search length. Consider trimming expenses, other income, or unemployment benefits to close the gap.

COBRA Coverage
If fully dedicated to COBRA, this severance covers about
13.9 months

With a lump sum, you generally have 60 days to elect COBRA and the first premium is due within 45 days of electing. The lump sum itself doesn't extend your active employee health coverage.

Whether severance affects unemployment eligibility genuinely varies by state and sometimes by exact plan language. Check your state unemployment office's rule before assuming either way.

Diagnostic

The full breakdown, including estimated take-home after withholding, your job-search runway, and how many months of COBRA this covers, is shown in the panel above.

Read the AI-layoffs severance playbook
What to do next

Find a High-Yield Account for Your Severance

Your action plan
  1. 1

    Set the target and timeline for this plan

    Size a severance package from years of service, estimate federal withholding and take-home, and see how many months it covers against your expenses and COBRA.

  2. 2

    Pressure-test one alternate scenario before deciding

    Assumptions change the answer, especially when rates, taxes, or timing matter.

  3. 3

    Save the result to Money Map or use the linked next action

    Turn the result into a prioritized action instead of treating it as a one-off number.

Find a High-Yield Account for Your Severance

This is an educational estimate, not tax, legal, investment, or lending advice. Confirm with a qualified professional or the provider before acting.

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Frequently Asked Questions

Everything you need to know.

Is severance pay taxed differently than regular pay?
It's taxed as a supplemental wage, the same category as a bonus: a flat 22% federal withholding rate up to $1 million in cumulative supplemental wages from the employer in the year (37% above that), plus standard FICA. Your actual tax liability at filing time depends on your full return, not just what was withheld.
Does severance pay affect my unemployment benefits?
It depends on your state and sometimes the exact plan language, confirmed directly: California generally does not count true severance against unemployment eligibility, while Texas can delay benefits for the period the severance covers, decided case by case. File your unemployment claim regardless and let your state agency make the determination.
Lump sum or salary continuation, which is better?
Neither is universally better. A lump sum gives you the full amount (and the tax hit) up front and starts your 60-day COBRA election clock immediately. Salary continuation may keep you on active employee health benefits longer and can delay when unemployment benefits start, since you're still receiving employer pay. Ask HR specifically how your continuation is structured.
How is COBRA priced compared to what I paid as an employee?
COBRA generally costs up to 102% of the full premium, employer and employee portions combined, plus a 2% administrative fee, not just the smaller amount deducted from your old paycheck. Budget for the full premium.
Is the Severance Package Calculator free to use?
Yes. SwitchWize calculators are free, and you do not need an account to run scenarios or view the result.
Does using the Severance Package Calculator affect my credit score?
No. Using a calculator does not trigger a credit check. A credit impact can occur only if you apply directly with a lender, card issuer, or provider.
Are the results personalized financial advice?
No. Calculator outputs are educational estimates based on the inputs you enter. Review assumptions and confirm terms directly with providers before making a financial decision.
What should I do after seeing the result?
Use the recommendation module on this page to find a high-yield account for your severance, or run Money Map to compare this banking & savings decision with your other opportunities.
How does SwitchWize choose related offers?
Related offers are matched by the calculator surface (hysa) and ranked using SwitchWize data such as rate, fees, trust signals, product fit, and switching friction. Paid relationships do not change organic ranking order.
How fresh are the rates and offers shown?
Rate and offer data is reviewed on a recurring cadence and every offer module shows review context or links to the methodology and disclosure pages.
Where can I see the ranking methodology?
The SwitchWize methodology page explains how rate freshness, editorial review, affiliate disclosure, and category ranking factors work.
Can Money Map use this result?
Yes. Money Map is the broader diagnostic path: it compares savings, mortgage, cards, and debt so you can see whether this calculator result is your highest-impact next move.

Why This Matters

Severance is taxed as supplemental wages, the same as a bonus, so a package that looks generous on paper can shrink meaningfully after federal withholding and FICA. And the real question isn't the size of the check, it's how many months it actually buys you against your real expenses, your other income, and the COBRA premium you're now paying in full.

How to Use It

  1. 1Enter your salary, years of service, and the weeks of pay per year your employer is offering
  2. 2Enter your monthly expenses and any other income during the gap
  3. 3Check your estimated take-home after federal withholding and FICA
  4. 4See your job-search runway against your expected search length, and how many months of COBRA the package covers
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Find a High-Yield Account for Your Severance