Severance Pay Tax Calculator
See what your severance check pays after taxes, and whether the 22% withheld will cover the tax it adds when you file.
Your severance take-home
$15,613
from $25,000 severanceFor $25,000 severance · California · single
Estimate based on 2026 federal and California tax rules updated Oct 2026 How we calculate
Your details
Will the withholding cover it?
Add the rest of your pay for this year to compare what is withheld from this check with the tax it adds when you file.
Your details
Severance Amount
The gross severance payment, before taxes
Other Pay This Year
Salary and other wages paid to you this year, apart from the severance
Location
Where you work
Filing Status
Your tax filing status
Your severance take-home
$15,613
from $25,000 severance
For $25,000 severance · California · single
Tax breakdown
You keep
62¢of every dollar
Your average dollar keeps 62¢.
Tax rates
Estimate based on 2026 federal and California tax rules updated Oct 2026 How we calculate
Will the withholding cover it?
Add the rest of your pay for this year to compare what is withheld from this check with the tax it adds when you file.
When 22% is not enough
Federal tax withheld from a lump-sum severance, against the federal tax it adds to a 2026 return. Single filer, standard deduction, no state income tax.
| Severance | Other pay this year | Withheld (22%) | Tax it adds | Due at filing |
|---|---|---|---|---|
| $30,000 | $60,000 | $6,600 | $5,950 | $0 |
| $100,000 | $120,000 | $22,000 | $24,134 | $2,134 |
| $250,000 | $200,000 | $55,000 | $83,900 | $28,900 |
How your severance is taxed
Severance is taxed as wages in the year you receive it. A lump sum is withheld like a bonus, which is often less than the tax it adds.
- Federal supplemental rate: A lump-sum severance usually has a flat 22% federal income tax withheld, or 37% on supplemental pay over $1 million in a year.
- Owed at filing: Added to a year's salary, severance is taxed at your top brackets, which can be 24% to 37%. When that is more than 22%, the difference is due when you file.
- State taxes: Most states with a flat supplemental rate use it for severance too. California withholds 6.6% on severance, not the 10.23% it uses for bonuses.
- FICA and state payroll taxes: Social Security and Medicare come out of severance like any other wages, and so do most state programs, such as California SDI and Washington Paid Family & Medical Leave. Colorado FAMLI does not apply to severance.
If the calculator shows a gap, you can ask your employer to withhold more on Form W-4 or make an estimated tax payment so it is not all due at once.
Frequently Asked Questions
Severance is taxed as wages. It is subject to federal and state income tax, Social Security and Medicare, and state payroll taxes such as California SDI. A lump sum is usually withheld at the flat 22% federal supplemental rate (37% on supplemental pay over $1 million in a year), plus your state's withholding.
You may. The 22% withheld is a flat rate, not your tax rate. A large severance on top of a year's salary can push part of your income into the 24%, 32% or 35% brackets, so the withholding falls short and you owe the difference when you file. The calculator compares the two once you add your other pay for the year.
Yes. The Supreme Court held in United States v. Quality Stores (2014) that severance payments are wages for Social Security and Medicare. Social Security stops once your wages for the year reach the wage base ($184,500 in 2026); Medicare has no cap.
Most states that publish a flat supplemental rate apply it to severance too, such as 11.7% in New York and 8% in Oregon. California withholds 6.6% on severance, not the 10.23% it uses for bonuses. States without a flat rate, Maryland's severance included, withhold it as regular wages, and nine states have no wage income tax.
Related Tools
- Tax Refund Calculator: Estimate your refund or balance due for the year
- Take-Home Pay Calculator: Calculate a regular paycheck at a new job
- Bonus Tax Calculator: Estimate take-home pay from a bonus
Paid another way?
Bonuses and commissions are withheld the same way federally, but some states set a different rate for each.