Severance Runway Calculator

Last updated July 2, 2026

Severance pay gives most people a false sense of how much time they have. A 10-week severance check sounds like 10 weeks of breathing room, but it often isn't — particularly because most states require you to begin your severance period before UI benefits start, and some states actually delay unemployment eligibility until severance payments end. Dividing your total severance by your monthly expenses gives you the real runway the money provides: $15,000 in severance against $4,000 per month in expenses is 3.75 months, not 10 weeks.

The critical variables are taxes and timing. Severance is taxed as ordinary income at the federal level — if your employer issues it as a lump sum, the 22 percent flat supplemental withholding rate applies, meaning a $15,000 gross severance package nets closer to $11,000 after federal withholding alone, before state taxes. Paid in salary-continuation installments, withholding follows your normal W-4 rate. If your state offsets unemployment benefits during severance continuation, the two income sources don't stack — you receive one or the other, extending the timeline in a different way than a simple runway calculation suggests. Always clarify with your state unemployment office how your severance structure affects your UI eligibility before making spending decisions based on an assumed runway.

The calculation shows your true severance runway by using the net after-tax amount, not the gross figure, and dividing by your actual monthly expenses. Then check your state's rules on severance and unemployment overlap. The real runway is almost always shorter than the headline severance number suggests.