Typical Severance Package: What Is Common and What Can Vary?
There is no federal standard severance formula. A common planning heuristic is one to two weeks of pay per year of service, but the real package depends on your employer's policy, your contract, tenure, level, the event, and negotiation. Here's what is commonly included, what you may be owed separately, and examples to plan with.
What is a normal severance package?
A typical severance package is roughly one to two weeks of base pay per year of service, often with a floor of two to four weeks. Two weeks per year is a strong, realistic target; one week per year is common at leaner companies. Senior leaders and executives frequently negotiate much more — sometimes a flat number of months.
But severance is more than the cash: benefits continuation, PTO payout, equity timing, outplacement, and references all count. None of it is required by federal law, so the written offer is a starting point, not the ceiling. Benchmark yours with the Severance Pay Calculator before you respond.
- Estimated time
- 6 min read
- Cost / impact
- Benchmark your offer before you sign
- What you need
- Your salary, tenure, and the written offer
Key takeaways
- The common norm is 1–2 weeks of pay per year of service, often with a 2–4 week floor.
- Seniority drives the number: ICs see weeks-to-months; executives negotiate 6–12+ months.
- Severance is not required by federal law — it comes from policy, contract, or a signed release.
- The non-cash terms (benefits, equity timing, references) are often the most valuable and negotiable.
- Severance is taxable, so the net you keep is smaller than the headline number.
What is a typical severance package?
“Typical” is a moving target, because no federal law sets a severance amount for private employers. What creates the norm is a mix of company policy, industry precedent, and negotiation. That said, one benchmark shows up again and again: about one to two weeks of base pay for every year you worked there, usually with a minimum floor so short-tenure employees still receive something. A company using a two-week formula would offer a 5-year employee about 10 weeks; a one-week formula would offer 5 weeks.
Two structural details matter. First, severance is almost always offered in exchange for a signed release of claims— you give up the right to sue, and the company gives you the package. Second, it is usually built on base salary, not total compensation, so bonus and equity are handled separately (and are worth asking about). Because the number is a starting point, it helps to know what is standard before you reply.
Severance norms by seniority
The single biggest driver of package size is your level. As roles get more senior, packages move from a simple weeks-per-year formula toward individually negotiated terms measured in months.
| Level | Common range | Notes |
|---|---|---|
| Entry / individual contributor | 2–4 weeks to ~1 month | Often a floor plus 1 week per year |
| Mid-level / senior IC | 1 month to ~3 months | Commonly 1–2 weeks per year of service |
| Manager | 1–3 months | Formula plus some negotiation |
| Director / senior manager | More individually negotiated | Formula plus negotiation; varies by employer |
| VP / executive | Set by the individual agreement | Often a negotiated employment or change-in-control contract — review the actual terms; ranges vary widely |
General ranges reflect common market practice, not verified national averages or a guarantee. Your offer depends on your employer, tenure, level, the event, and negotiation.
Executives are a special case.Senior leaders often have individually negotiated employment agreements, change-in-control arrangements, or fixed-month severance provisions — so the controlling terms live in the actual agreement or plan, not a market rule of thumb. Treat any executive figures as illustrative, and review your own documents.
Severance norms by industry
Technology
Often 2+ weeks per year, with equity-vesting and COBRA subsidy terms in larger layoffs
Finance / banking
Formula-driven, frequently 2 weeks per year; bonus treatment matters a lot
Professional services
1–2 weeks per year, sometimes tied to notice periods
Retail / hospitality
Leaner — sometimes a flat few weeks or none unless policy requires it
Startups
Highly variable; cash-strapped firms may offer little, so terms and timing are key
What you're owed vs what's negotiated
Before you judge whether an offer is generous, separate two very different things. Some money may be owed to you regardless of severance; the rest is the actual severance or negotiated consideration. Don't let legally owed wages get counted as generosity inside the offer.
Potentially owed independently of severance
- Final wages. Pay for time actually worked through your last day.
- Earned commissions. Commissions you earned under the applicable plan.
- Earned bonus. A bonus earned under the plan's terms (plan language controls).
- PTO payout. Accrued unused PTO where state law or employer policy requires payout.
- Reimbursable expenses. Outstanding business expenses you're owed.
Severance / negotiated consideration
- Additional weeks of salary. Severance pay beyond anything already owed.
- COBRA subsidy. Employer-paid or subsidized health continuation for a period.
- Equity / option treatment. Vesting or exercise-window terms — set by your grant/plan.
- Reference language. An agreed, neutral reference and departure description.
- Outplacement. Career coaching and job-search support.
- Release terms. The claims you give up in exchange for the package.
- Non-disparagement. Ideally mutual (two-way) rather than one-sided.
- Non-compete / non-solicit. Narrowing or removing restrictions, or being paid for them.
- Signing deadline. How long you have to decide — and any extension.
PTO, earned bonus, and commission rules vary by state and plan — confirm what's required where you work. A COBRA subsidy can be worth thousands, so value it using how much COBRA costs.
What's negotiable in a severance package?
More than most people assume. Employers usually expect a counter, and the release you're asked to sign is your leverage. Common, reasonable asks:
- More weeks of pay — especially if your tenure or contributions exceed the formula.
- A longer benefits or COBRA subsidy period.
- An extended window to exercise vested stock options.
- A neutral or positive reference, in writing.
- Narrowed non-compete, non-solicit, or non-disparagement clauses.
- Keeping your laptop, phone, or unused professional-development budget.
If you're 40 or older and asked to waive federal age-discrimination claims, the OWBPA generally requires at least 21 days to consider the agreement (45 days for a qualifying group layoff or exit-incentive program) plus a 7-dayrevocation window after signing, and the agreement must advise you in writing to consult an attorney. These periods apply to that age-claim waiver — not automatically to every severance agreement. Never sign on the spot; see how to negotiate severance. U.S. EEOC
Offer scorecard: what to check before you sign
Go category by category to spot missing terms and questions to raise. This is a checklist, not legal approval of your agreement — for a real review, especially if you're 40+, have a non-compete, or the amount is large, consider a licensed employment attorney.
| Category | What to check / ask |
|---|---|
| Cash | How many weeks, and is any of it money you were already owed? |
| Health coverage | Is COBRA subsidized, for how many months, and what's the real premium? |
| PTO / bonus / commission | Are accrued PTO and earned bonus/commission addressed separately and in writing? |
| Equity | What happens to vested/unvested equity, and what's the option-exercise window per the grant? |
| Reference | Is there agreed neutral reference language (dates, title, role elimination)? |
| Restrictions | Any non-compete, non-solicit, or non-disparagement — and is non-disparagement mutual? |
| Claims released | What claims are you giving up, and is the release broader than expected? |
| Decision deadline | How long do you have, and (if 40+ and waiving age claims) are the OWBPA periods present? |
| Rehire status | Does your file show eligible for rehire? |
| Unemployment interaction | Could the severance structure delay or reduce unemployment in your state? |
Example severance package breakdown
Here's a realistic example for a mid-level employee, $104,000 salary ($2,000/week), 6 years of tenure, at a company using a two-week-per-year formula.
Severance pay
6 years × 2 weeks = 12 weeks
$24,000
Accrued PTO payout
80 unused hours (where required)
$4,000
COBRA subsidy
3 months of single coverage (~$793/mo)
$2,379
Outplacement services
3 months of career coaching
Included
Neutral reference
Dates + title confirmed
Included
Approx. cash value
≈ $30,379 (pre-tax)
Illustrative only. Severance is taxable, so the net is lower — estimate it with the Severance Tax Calculator.
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Frequently asked questions
What is a typical severance package?+
How many weeks of severance is normal per year of service?+
Do severance packages differ by seniority?+
Is severance pay required by law?+
What is included in a severance package besides pay?+
Can I negotiate a bigger severance package?+
Is a severance package taxable?+
Sources & methodology
There is no federal severance formula, so the ranges here are planning heuristics (commonly illustrated as one to two weeks of pay per year of service), not verified national averages or legal requirements. Your controlling terms are your employer's policy, plan documents, and any employment agreement. The example figures are illustrative and use the KFF 2025 COBRA benchmark.
- Severance Pay — U.S. Department of LaborSeverance is a matter of agreement between employer and employee; not required by federal law. · Last verified Jul 24, 2026
- Understanding Waivers of Discrimination Claims in Severance Agreements — U.S. Equal Employment Opportunity CommissionOWBPA review/revocation periods (21/45/7 days) for waiving age claims by workers 40+. · Last verified Jul 24, 2026
- 2025 Employer Health Benefits Survey — KFF (Kaiser Family Foundation)Employer-plan premium benchmark used to value a COBRA subsidy in the example. · Last verified Jul 24, 2026
Important disclaimer
This guide is educational only and is not legal, tax, or financial advice. Severance norms are general market practice, not guarantees, and your package depends on your employer, contract, tenure, and state law. Review any agreement carefully and consult a qualified employment attorney before signing, especially if you have concerns about your rights. See our full disclaimer.
Deepak Middha is the founder of LayoffNext and a Chartered Accountant (ICAI, India). A U.S. immigrant with nearly 20 years of experience — and 17 years in hedge fund and private equity administration, including as Vice President of Fund Accounting at NAV Fund Administration Group and Associate Director of Private Equity and Real Estate at SS&C Technologies — he builds free, plain-language layoff tools and guides for employees, H-1B workers, and immigrant families.