Losing a job is stressful enough without a confusing paycheck. Severance pay is treated as a supplemental wage, which means your employer typically withholds a flat 22% for federal tax(plus Social Security and Medicare) rather than your normal rate. That upfront withholding often looks brutal — but it's just withholding. Your actualtax is your ordinary marginal rate on the severance stacked on top of whatever you've already earned this year, and if too much was withheld you get it back at tax time. This calculator shows the real number by comparing your take-home with and without the payout. For one-time bonuses, use the bonus tax calculator instead.
