Severance Pay in Texas: Calculator & 2026 Guide
Calculate your estimated severance package in Texas. Texas has no state income tax — you keep more of your severance.
Free Severance Pay Calculator
Estimate your severance package based on your salary, years of service, and industry
Texas Severance Pay Laws
Texas has no state income tax - your severance will only have 22% federal withholding, not additional state tax.
How Severance Is Taxed in Texas
| Tax Type | Rate | On $50,000 Severance |
|---|---|---|
| Federal (Supplemental) | 22.0% | $11,000 |
| Texas State Tax | 0.0% | $0 |
| Total Withholding | 22.0% | $11,000 |
| You Keep | 78.0% | $39,000 |
Texas Severance by Industry
Example: 5 years of service, $75,000 salary, individual contributor in Texas
| Industry | Weeks/Year | Gross Estimate | After Tax |
|---|---|---|---|
| Technology | 2-4 | $21,635 | $16,875 |
| Finance & Banking | 2-4 | $21,635 | $16,875 |
| Healthcare | 1-3 | $14,423 | $11,250 |
| Retail | 0.5-2 | $7,212 | $5,625 |
| Manufacturing | 1-3 | $14,423 | $11,250 |
| Consulting & Professional Services | 2-4 | $21,635 | $16,875 |
| Government | 1-2 | $7,212 | $5,625 |
| Nonprofit | 1-2 | $10,817 | $8,438 |
| Other Industry | 1-3 | $14,423 | $11,250 |
How to Negotiate Severance in Texas
Texas has no state income tax, so you keep more of your severance. Your effective tax rate is just the 22% federal withholding.
- ✓ Ask for more weeks: Counter with 50% more than the initial offer
- ✓ Negotiate COBRA: Employer-paid health coverage for 6-12 months
- ✓ Get a written reference: Protect your future career prospects
- ✓ Review non-compete clauses: Negotiate restrictions before signing
- ✓ Consult a lawyer: Employment attorneys often negotiate 2-5x the original offer
Think Your Severance Is Too Low?
Employment lawyers have helped workers negotiate 2-5x their original offers. Get a free consultation.
Texas Severance Pay FAQ
Is severance pay required in Texas?▼
No, Texas does not have a state law requiring employers to provide severance pay. However, the federal WARN Act may require 60 days notice or pay in lieu of notice for large layoffs.
How is severance taxed in Texas?▼
Severance in Texas is taxed at 22.0% combined — 22% federal supplemental rate. Texas has no state income tax, so you keep more. On a $50,000 severance, you'd take home approximately $39,000.
What is the WARN Act in Texas?▼
The federal WARN Act applies in Texas, requiring employers with 100+ employees to give 60 days advance notice for mass layoffs of 50+ workers. Failure to provide proper notice can result in back pay for the notice period.
Can I collect unemployment and severance in Texas?▼
This depends on how your severance is structured. Some Texas workers can receive both simultaneously, while others may see a delay in unemployment benefits. If severance is paid as a lump sum, it's less likely to delay unemployment than if paid as continued salary. Contact Texas's unemployment office for specific guidance.
Major Employers in Texas
Severance Pay in Nearby States
📋 Free Severance Negotiation Checklist
The exact steps employment lawyers use to negotiate higher severance. Used by 10,000+ employees.