Your numbers
Explore the numbers
Examples, chart, and saved snapshots
Start with a realistic example, adjust the inputs, or save your numbers before experimenting.
Four weeks at $1,200, plus $800 of benefits
Weekly pay is 1,200. The agreement pays 4 weeks. Benefits you continue, such as a health premium, are 800 in this example. The employer payroll tax box starts at 0. The dollars and the 4 weeks are an example. The Department of Labor does not set either one.
Weekly pay: 25% lower
Change weekly pay to 900 while keeping the other example values the same.
Weekly pay: 25% higher
Change weekly pay to 1,500 while keeping the other example values the same.
Interactive chart
See what changes the result
This result is categorical, so compare the calculated values in the examples and snapshots instead.
The chart changes one input while holding all other current values steady. It is a sensitivity view, not a forecast.
Browser snapshots
Freeze these values
Save the current calculation, experiment freely, and restore it later.
No saved snapshots for this calculator yet.
Compare snapshots
What changed?
Save one more snapshot to compare plans.
Saved only in this browser. Nothing is uploaded, and clearing browser data removes the snapshots.
Quick answer
What does the Severance pay cost calculate?
What does severance cost in pay plus benefits you add? This calculator uses weekly pay, weeks of pay, benefits you continue, and employer payroll tax to estimate weeks of pay, plus benefits and tax you add immediately in your browser.
With the values currently entered, the result is $5,600.00 — cash, benefits, and the tax you typed. It also shows cash severance, benefits, and employer payroll tax.
How to use the Severance pay cost
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Weekly pay
- Weeks of pay — entered in weeks
- Benefits you continue
- Employer payroll tax — entered in %
Severance pay cost formula
Cash = weekly pay × weeks. Cost = cash + benefits + cash × employer payroll tax percent.
Assumptions
- The Department of Labor says there is no requirement in the FLSA for severance pay. Severance pay is a matter of agreement between an employer and an employee, and it is often based on length of employment. The 4 weeks, the $1,200, and the $800 are an example. The department does not set them.
- IRS Publication 15 (2026) says severance payments are wages subject to Social Security and Medicare taxes, federal income tax withholding, and FUTA tax. The employer share is 6.2 percent for Social Security, up to a wage base of $184,500, and 1.45 percent for Medicare with no wage base. Together that is 7.65 percent while the wage base still has room. The tax box starts at 0. Type 7.65 when you want that employer share on the cash pay. Withholding from the employee is part of the cash pay, not a second line.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
There is no requirement in the Fair Labor Standards Act for severance pay. Severance pay is a matter of agreement between an employer and an employee, often based on length of employment.
Publication 15, Circular E, Employer’s Tax GuideUS Internal Revenue ServiceScope: US employer payroll tax; rates are user-editableSplits Social Security (6.2%) and Medicare (1.45%) on wages. Employee and employer each pay 7.65% on wages below the Social Security wage base.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Severance pay cost example and edge cases
Severance cost here is weeks of pay, plus benefits you keep paying, plus an employer payroll tax percent if you type one. The Department of Labor says the Fair Labor Standards Act does not require severance. It is a matter of agreement, often based on length of employment. You type the weeks.
Example: Four weeks at $1,200, plus $800 of benefits
Weekly pay is 1,200. The agreement pays 4 weeks. Benefits you continue, such as a health premium, are 800 in this example. The employer payroll tax box starts at 0. The dollars and the 4 weeks are an example. The Department of Labor does not set either one.
- Weekly pay
- 1,200
- Weeks of pay
- 4 weeks
- Benefits you continue
- 800
- Employer payroll tax
- 0 %
Calculated result$5,600.00cash, benefits, and the tax you typed
Four weeks at 1,200 is 4,800 of cash pay. Benefits add 800. With the tax box at 0, the cost is 5,600.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read the 5,600 first. It is 4,800 plus 800. The tax line stays at 0 until you type a percent.
- Publication 15 for 2026 treats severance as wages. The employer share is 6.2 percent for Social Security up to a wage base of 184,500, and 1.45 percent for Medicare with no wage base. Type 7.65 while that wage base still has room and the tax line becomes 367.20 on the 4,800. The total is then 5,967.20. Income tax withheld from the employee is part of the 4,800, paid to the Treasury instead of the employee.
Edge cases worth checking
The agreement counts days of pay
Ten days of pay is not 10 in the weeks box. Divide the days by the working days the agreement uses. Five work days in a week turns 10 days into 2 weeks. The cash line is then 2 times 1,200, which is 2,400, before benefits.
The 7.65 percent is also in benefits
The tax box applies the percent to the cash pay only. A health premium stays in the benefits box, and this page does not tax that premium. If you also type the 367.20 of employer tax into benefits, and leave 7.65 in the tax box, the 5,967.20 counts that tax twice.
What changes the result most
Weekly pay
Use a current amount for weekly pay. Include fees or recurring costs that belong in the same figure.
Weeks of pay
Keep weeks of pay on the same time basis as the other inputs. Monthly and annual values are easy to mix up.
Benefits you continue
Use a current amount for benefits you continue. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Weekly pay: 25% lower
900$4,400.00cash, benefits, and the tax you typed
Weekly pay: 25% higher
1,500$6,800.00cash, benefits, and the tax you typed
Weeks of pay: 25% higher
5 weeks$6,800.00cash, benefits, and the tax you typed
Common mistakes
Check weekly pay
The Department of Labor says there is no requirement in the FLSA for severance pay. Severance pay is a matter of agreement between an employer and an employee, and it is often based on length of employment. The 4 weeks, the $1,200, and the $800 are an example. The department does not set them. Make sure this matches the number you enter.
Keep employer payroll tax consistent
IRS Publication 15 (2026) says severance payments are wages subject to Social Security and Medicare taxes, federal income tax withholding, and FUTA tax. The employer share is 6.2 percent for Social Security, up to a wage base of $184,500, and 1.45 percent for Medicare with no wage base. Together that is 7.65 percent while the wage base still has room. The tax box starts at 0. Type 7.65 when you want that employer share on the cash pay. Withholding from the employee is part of the cash pay, not a second line. Use the same units and time period throughout the calculation.
Do not rely on one severance pay cost scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What does severance cost in pay plus benefits you add?
It does not replace a quote, contract, accountant, or local employment guidance.