Severance Pay Tax Calculator
What’s left of your severance? Estimate the federal tax withheld (supplemental rate) plus FICA and your take-home — in dollars.
Key facts
- Severance is a supplemental wage: employers usually withhold federal tax at the flat 22% rate (37% on the part of yearly supplemental wages over $1M) — IRS Pub 15. That’s withholding, not your final tax.
- Severance is also subject to FICA: Social Security 6.2% up to the 2026 wage base ($184,500) and Medicare 1.45% (+0.9% Additional Medicare over $200k single / $250k married). The Supreme Court confirmed this in 2014 (US v. Quality Stores).
- Example: a $50,000 severance (no other YTD wages, single) has about $14,825 withheld — $11,000 federal + $3,100 Social Security + $725 Medicare — leaving about $35,175. Your return trues up the income-tax part.
FAQ
- How is severance taxed in the US?
- As a supplemental wage: federal tax is usually withheld at a flat 22% (37% over $1M/year), plus FICA. That is withholding — your final tax is settled on your annual return.
- Is severance subject to Social Security and Medicare?
- Yes. Severance counts as wages and is subject to FICA (US v. Quality Stores, 2014) — Social Security up to the wage base, Medicare with no cap plus 0.9% Additional Medicare over the threshold.
- Will I get some of it back?
- Possibly. The 22% is a flat withholding rate. If your actual marginal rate is lower you may get a refund; if higher, you may owe more at filing.