🇺🇸 Minnesota Severance Pay Calculator 2026
Free Minnesota severance pay calculator for 2026. Calculate severance based on years of service, salary, and severance policy. Includes Minnesota-specific labor rules, tax withholding estimates, and severance negotiation tips.
Choose an industry to auto-fill typical severance policy values. You can modify any values afterward.
Common values: 1-2 weeks per year of service
Advanced Features
Select your state to see relevant labor rules and requirements
Additional Components
Add unused vacation/PTO days to severance
Add earned but unpaid bonus/commission
Estimate COBRA health insurance costs
Estimate federal and state tax withholding
Minnesota Severance Pay Calculator - Calculate Your Severance Package
Our free Minnesota severance pay calculator helps you determine exactly how much severance pay you may be entitled to based on your years of service, salary, and company policy. Whether you're being laid off, terminated, or negotiating a severance package, this calculator provides a comprehensive estimate of your severance including tax withholding.
The Minnesota severance calculator accounts for:
- Years of service (affects weeks/months of severance)
- Annual salary or hourly wage
- Severance policy type (weeks per year, fixed payout, or custom formula)
- Payment schedule (lump sum vs. installments)
- Unused PTO payout
- Bonus or commission
- COBRA health insurance estimate
- Federal and Minnesota state tax withholding
- Net severance pay after all deductions
Minnesota Severance Pay Laws and Requirements
Understanding Minnesota severance pay laws is crucial when negotiating your exit package. In most US states, including Minnesota, severance pay is generally not legally required unless:
- It's specified in your employment contract
- Your company has a written severance policy
- You have a collective bargaining agreement
- Your employer has a history of providing severance to similarly situated employees
However, many employers offer severance packages to:
- Maintain positive relationships with departing employees
- Obtain release of claims (severance agreements often include waivers)
- Attract and retain talent by demonstrating fair treatment
- Provide a safety net during job transitions
Tax Withholding on Severance Pay in Minnesota
Severance pay is considered taxable income and is subject to the same tax withholding as regular wages. In Minnesota, your severance pay will be subject to:
- Federal Income Tax: Withheld at a supplemental rate (typically 22% for amounts under $1 million)
- Minnesota State Income Tax: Withheld at your state's income tax rate
- Social Security: 6.2% on severance up to the annual wage base limit ($168,600 in 2026)
- Medicare: 1.45% on all severance pay (plus 0.9% additional Medicare tax for high earners)
Our Minnesota severance calculator automatically calculates tax withholding estimates so you can see your net severance pay after all federal and Minnesota state taxes are deducted.
Lump Sum vs. Installment Payments in Minnesota
Severance pay can be paid as a lump sum (all at once) or in installments (paid over time, such as bi-weekly or monthly). Each option has pros and cons:
- Immediate access to funds
- Higher tax withholding upfront
- May push you into a higher tax bracket
- One-time tax hit
- Full control over the money immediately
- Steady income stream
- Taxes spread over multiple pay periods
- May keep you in a lower tax bracket
- Provides income while job searching
- Continues health insurance eligibility period
Our Minnesota severance calculator shows you a comparison of both payment options, including after-tax amounts, so you can make an informed decision based on your financial situation.
- Know Your Value: Use our calculator to estimate fair severance based on years of service and industry standards. Typically, severance ranges from 1-4 weeks per year of service.
- Review Your Employment Contract: Check if your contract specifies severance terms. If so, ensure your employer honors those commitments.
- Consider Total Package: Don't just focus on cash. Negotiate for continued health insurance (COBRA subsidies), outplacement services, or extended benefits.
- Understand Tax Implications: Remember that severance is taxable income. Our calculator shows you net pay after federal and Minnesota state taxes.
- Timing Matters: Lump sum payments may push you into a higher tax bracket. Consider installment payments to spread tax burden.
- Get It in Writing: Always get severance terms in writing. Review the severance agreement carefully, especially any release of claims provisions.
- Consult Professionals: Consider consulting with an employment attorney, tax advisor, and financial planner before signing a severance agreement in Minnesota.