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There is no single official average severance package in the United States. The latest broad cross-industry benchmark we found reported an average of 19.3 weeks of severance, but that figure varies sharply by job level and should not be treated as a guaranteed payout. For employers that use a tenure-based formula, a common rule of thumb is about one to two weeks of base pay for each year of service.

For that reason, “average” is best treated as a benchmark—not a guarantee. A severance package can include much more than cash, and the headline payment is only one part of what an employee should review.

Quick answer: what is a typical severance package?

For U.S. employees who receive severance, a commonly cited starting point is 1–2 weeks of base pay per year of service. Some employers use a fixed number of weeks, some set a minimum payment, and others negotiate individually—especially for senior or executive roles.

A package may also include continued health coverage, payment for eligible accrued leave, bonus or commission treatment, equity terms, outplacement support, and other benefits. Whether those items are included depends on the employer and the agreement.

Average severance package by years of service

The table below shows what the common 1–2-weeks-per-year benchmark looks like for an employee earning $78,000 per year, or $1,500 per week. These are illustrations only—not legal entitlements or market guarantees.

Years of service	1 week per year	2 weeks per year
2 years	$3,000	$6,000
5 years	$7,500	$15,000
10 years	$15,000	$30,000
15 years	$22,500	$45,000
20 years	$30,000	$60,000

If your salary is different, the basic benchmark can be estimated with:

Weekly base pay × severance weeks per year × years of service

For example, someone earning $104,000 per year has weekly base pay of about $2,000. At two weeks of severance per year after eight years of service, the illustrative amount would be about $32,000 before taxes and other adjustments.

Why there is no official U.S. “average” severance package

The U.S. Department of Labor states that the Fair Labor Standards Act does not require severance pay. Severance is generally a matter of agreement between an employer and employee or the employee’s representative.

That means there is no federal schedule saying that five years of service must equal a certain number of weeks, or that every laid-off employee must receive the same percentage of salary. Company policies, employment contracts, collective bargaining agreements, state-specific rules, and negotiated separation agreements can all change the result.

Official guidance: U.S. Department of Labor — Severance Pay.

What usually affects the size of a severance package?

Two employees at the same company can receive different offers because severance is often shaped by several factors.

• Years of service: tenure is one of the most common inputs in a severance formula.
• Base salary: many formulas use weekly or monthly base pay rather than total compensation.
• Job level: managers, directors, vice presidents, and executives often receive different structures from individual contributors.
• Industry: benchmarking data shows that severance levels can vary materially across industries.
• Company size and policy: larger employers are more likely to use formal minimums, caps, or tiered formulas, while smaller employers may decide case by case.
• Reason for separation: a reduction in force, restructuring, individual termination, retirement arrangement, or negotiated departure may be handled differently.
• Contract or collective bargaining terms: written agreements can create obligations beyond the general federal baseline.
• Negotiation: the first offer is not always the final package, although an employer is not required to increase it.

What does a typical severance package include?

Severance is often discussed as if it were only a cash payment. In practice, the full package can contain several separate items.

1. Severance pay

This is the cash portion of the package. It may be based on weeks of base pay per year of service, a fixed number of weeks or months, or another formula set by company policy or negotiation.

2. Health insurance or COBRA support

An employer may offer to subsidize health-insurance continuation for a period after employment ends. The exact duration and employee cost should be checked in the written agreement.

3. Accrued vacation or paid leave

Payment for unused vacation or paid leave is separate from the severance formula in many cases. Whether it must be paid can depend on employer policy and state law.

4. Bonus, commission, or incentive treatment

If a bonus or commission period was already in progress, the agreement may explain whether any amount is paid, prorated, forfeited, or handled under an existing compensation plan.

5. Equity or stock awards

Employees with stock options, restricted stock, or other equity should review vesting, exercise windows, repurchase rights, and any acceleration provisions. These terms can be worth more than the cash portion for some employees.

6. Outplacement or career support

Some packages include résumé assistance, career coaching, job-search support, or access to an outplacement service.

Typical severance package for 5, 10, or 20 years

Searches for a “typical severance package for 5 years” or “for 20 years” usually assume that tenure alone determines the answer. It does not—but tenure can be used to build a reasonable benchmark when the employer follows a weeks-per-year formula.

At the commonly cited 1–2 week benchmark:

• 5 years: roughly 5–10 weeks of base pay.
• 10 years: roughly 10–20 weeks of base pay.
• 20 years: roughly 20–40 weeks of base pay.

A company can offer less or more than those ranges. Some employers also use minimum or maximum caps, which can make the relationship between tenure and severance less linear.

Is severance pay based on base salary or total compensation?

Many severance formulas start with base salary, but there is no universal rule requiring every employer to calculate it that way. Employees with bonuses, commissions, equity, allowances, or other variable compensation should read the agreement carefully to see what definition of pay is being used.

If you need to separate salary from other compensation first, What Is Gross Pay? and What Is Annual Income? explain the related pay concepts.

Lump-sum severance vs salary continuation

A severance package may be paid as one lump sum or spread across normal pay periods. These structures can affect cash flow, payroll withholding, benefits timing, and—depending on the state—how unemployment benefits interact with the payment.

Do not assume that receiving the same gross amount means the two structures have identical consequences. Review the payment schedule and any conditions in the agreement before comparing offers.

Is severance pay taxable?

Yes, severance pay is generally taxable compensation. IRS Publication 15 lists severance or dismissal pay as subject to federal income tax withholding and Social Security and Medicare taxes. The IRS also treats severance pay as supplemental wages for federal withholding purposes.

That means the net amount deposited into your account can be materially lower than the gross severance figure in the agreement. The withholding shown on the payment is not necessarily the same as your final tax liability for the year.

Official source: IRS Publication 15 (2026). For a related explanation of supplemental-wage withholding, see Why Are Bonuses Taxed So High?.

Is severance pay required after a layoff?

Federal law does not generally require an employer to provide severance simply because an employee is laid off. The Department of Labor states that the FLSA has no severance-pay requirement.

That does not mean every employee has no rights. An employment contract, severance plan, company policy, collective bargaining agreement, or state-specific law may matter. Large plant closings and mass layoffs can also raise separate notice issues under the federal WARN Act, which is primarily an advance-notice law rather than a universal severance formula.

Official source: U.S. Department of Labor — WARN Act Compliance Assistance.

How to evaluate whether a severance package is good

Comparing only the number of severance weeks can miss important value or restrictions. Before deciding whether an offer is good for your situation, review the entire agreement.

1. Calculate the cash value. Convert the offer into weeks of base pay and compare it with your tenure.
2. Check what happens to benefits. Note when health coverage ends and whether the employer contributes toward continuation coverage.
3. Review unpaid compensation. Look at accrued leave, commissions, bonus eligibility, expense reimbursements, and other amounts separate from severance.
4. Review equity deadlines. Stock-option exercise windows and vesting rules can create time-sensitive decisions.
5. Check restrictions and releases. Understand any release of claims, confidentiality, non-disparagement, cooperation, nonsolicitation, or other obligations before signing.
6. Check the payment structure. Confirm whether severance is a lump sum or salary continuation and whether payments can stop under stated conditions.

For a large or complex package—or one involving legal claims, restrictive covenants, executive compensation, or significant equity—consider getting advice from a qualified employment attorney or tax professional before signing.

Can you negotiate a severance package?

Sometimes. Whether there is room to negotiate depends on the employer, the reason for separation, company policy, the employee’s role, and the terms already offered.

Potential discussion points can include additional severance weeks, the payment schedule, benefits continuation, bonus or commission treatment, equity deadlines, outplacement support, the termination description, and the timing of restrictive obligations. An employer is not required to accept requested changes.

Frequently asked questions

What is the average severance package in the U.S.?

There is no official national figure that applies to every worker, but Challenger, Gray & Christmas’ 2025 benchmarking report found an average of 19.3 weeks of severance across industries using 2024 package data. That average is pulled upward by senior and executive packages, so for an individual employee the more practical comparison is often the employer’s formula—commonly around one to two weeks of base pay per year of service—plus job level, industry, benefits, equity, and any minimum or maximum cap.

Is two weeks per year a good severance package?

Two weeks per year falls at the upper end of the commonly cited 1–2 week benchmark, but whether an offer is good depends on more than the cash formula. Benefits, bonus or equity treatment, legal restrictions, tenure, seniority, and the reason for separation can all change the value of the package.

What is a typical severance package for 10 years?

Using a 1–2 week-per-year benchmark, 10 years of service would equal roughly 10–20 weeks of base pay. That is an illustration, not a legal entitlement or guaranteed market rate.

What is a typical severance package for 20 years?

Using the same benchmark, 20 years would equal about 20–40 weeks of base pay. Employer caps, minimums, executive arrangements, collective bargaining terms, or negotiated agreements can produce a different result.

Does severance include unused PTO?

Not automatically. Unused paid leave and severance are separate concepts. Whether unused PTO must be paid can depend on state law and employer policy, so the agreement and applicable rules should be reviewed separately.

Does severance affect unemployment benefits?

It can. Unemployment rules are state-specific, and the effect may depend on whether severance is paid as a lump sum or allocated over a period. Check your state unemployment agency’s current rules rather than assuming the same treatment nationwide.

The bottom line

The most useful answer to “What is the average severance package?” is not one national dollar figure. For employers that use a tenure-based formula, one to two weeks of base pay per year of service is a practical benchmark, but the complete package can be worth more or less depending on benefits, bonuses, equity, taxes, payment structure, and the agreement’s legal terms.

Use the benchmark to understand the offer—not to assume what an employer legally owes. For individual legal or tax questions, professional advice may be appropriate.