Nómina y prestaciones · Glosario
What is Severance Pay?
Definición rápida
Compensation paid by an employer to an employee upon termination, often based on years of service.
Explicación completa
Severance pay is a lump sum or continued paycheck given to an employee when they are involuntarily terminated (laid off, position eliminated). It is NOT legally required in the US for private-sector workers (unlike in many EU countries). Typical severance: 1–2 weeks of pay per year of service. Severance is generally taxable as wages. It may be conditioned on signing a release of claims (waiving the right to sue). Negotiating severance is possible: higher amount, continued benefits, outplacement services, neutral reference. Accepting severance usually means giving up the right to sue the employer. Unfair severance terms can sometimes be negotiated.
Calculadoras relacionadas
Calculators that use or explain Severance Pay.
Términos relacionados
More from Nómina y prestaciones
Gross vs. Net Pay
Gross = total earnings before deductions. Net = what actually hits your bank account after taxes and withholdings.
Tax Bracket
A range of income taxed at a specific rate. Higher income does not mean all of it is taxed at the higher rate.
401(k)
A US employer-sponsored retirement plan that lets employees save pre-tax dollars. Often includes employer matching.
Roth IRA
An individual retirement account funded with post-tax dollars; withdrawals in retirement are tax-free.
Social Security
A US federal program providing retirement, disability, and survivor benefits, funded by payroll taxes.
Overtime Pay
Wages paid at a higher rate (typically 1.5×) for hours worked beyond the standard 40-hour workweek.
Last reviewed: June 15, 2026 • Category: Nómina y prestaciones