United States · 2026 planning tool

Severance Pay and Tax Calculator

Estimate 2026 federal supplemental-wage, payroll, and entered state/local withholding.

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Models separately identified supplemental wages using 22% up to the $1 million annual threshold and mandatory 37% above it. Actual final income tax can differ.

Official sources and scope

Rules and source methodology reviewed September 11, 2026.

IRS Publication 15 (2026), section 7 · IRS Additional Medicare Tax

How severance withholding is estimated

IRS Publication 15 treats severance as supplemental wages. This calculator applies the optional 22% federal rate through $1 million of calendar-year supplemental wages and the mandatory 37% rate above that threshold, plus employee Social Security and Medicare withholding and a user-entered state or local rate.

Withholding is not final income tax. The employer may use an aggregate method where allowed, and your return reconciles severance with all other taxable income, deductions, credits and payments.

Official sources