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 Ohio?

Yes — at Ohio's new flat 2.75% rate (2026), plus municipal wage tax in most cities (typically 1–3%), on top of federal 22% supplemental withholding, Social Security, and Medicare. State + city usually totals 4–5.5% before the federal share.

Does Ohio have a WARN Act?

No state version. The federal WARN Act applies: employers with 100+ full-time employees owe 60 days' notice before mass layoffs or closings, with back-pay liability for violations — separate from any severance package.

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

Generally not for the same weeks. Ohio deducts severance allocated to post-separation weeks from benefits dollar-for-dollar — if weekly severance meets or beats your weekly benefit amount, benefits wait until the severance runs out. File immediately anyway so your claim is established.

Severance Pay Calculator for Ohio (2026)

Severance Pay Calculator — Ohio

Ohio just simplified its income tax — 2026 is the first year of a flat 2.75% state rate, among the lowest severance tax bites of any income-tax state. Two Ohio-specific wrinkles remain: most Ohio cities levy their own municipal income tax on wages (typically 1–3%), and Ohio is one of the states that deducts severance from unemployment benefits dollar-for-dollar.

Estimate your package below using 2.75% as the state rate — and add your city's rate if you live or worked in a municipality with a wage tax. Then check the unemployment section: in Ohio, the timing of your benefits depends directly on your severance schedule.

How Ohio taxes severance

As of 2026 Ohio taxes income at a flat 2.75% — down from a graduated system — and severance is withheld at the state supplemental rate alongside the federal 22%, Social Security, and Medicare. The bigger Ohio-specific factor is municipal tax: most cities tax wages, commonly 1–3% (Columbus and Cleveland at 2.5%), and severance is generally subject to it. State plus city often totals 4–5.5%.

Layoff notice in Ohio: federal WARN only

Ohio has no mini-WARN statute, so the federal WARN Act sets the only notice rules: 60 days' written notice from employers with 100+ full-time workers before a plant closing or mass layoff of 50+ at one site. Ohio's manufacturing base means federal WARN actually bites here fairly often — if you were part of a large sudden layoff with no notice, that back-pay claim is separate from your severance.

Severance and unemployment benefits in Ohio

Ohio is one of the stricter states: severance pay allocated to weeks after your separation is deducted from unemployment benefits dollar-for-dollar for those weeks. If your weekly severance equals or exceeds your weekly benefit amount, you receive nothing for that week and your benefits effectively start when the severance ends. A true unallocated lump sum may be treated differently — report it exactly and let ODJFS classify it. File your claim immediately either way; delaying doesn't help.

Severance Pay Calculator — Ohio

How Ohio taxes severance

Layoff notice in Ohio: federal WARN only

Severance and unemployment benefits in Ohio

Severance questions in Ohio

Severance calculators for other states