Severance Package
 |
Definition of 'Severance Package'A bundle of pay and benefits offered to an employee upon being laid off from a company. The receipt of a severance package is contingent upon signing a severance agreement. The amount of money received is usually based on the length of employment prior to termination, and may include payment for unused vacation and sick days, and unreimbursed business expenses. Other continued benefits that may be offered or negotiated include life insurance, disability insurance and the use of company property, such as a laptop, cell phone, personal digital assistant (PDA) or vehicle. Companies may also offer outplacement assistance, to help the former employee find a new job. |
 |
Investopedia explains 'Severance Package'Your employee handbook should include information on your company's severance package policy. Keep in mind, however, that the handbook may be out of date, and that severance packages are negotiable. Companies are not required to offer a severance package, and in fact may not be able to offer one if they are letting employees go because they are in major financial trouble.Accepting a severance package may make you ineligible to file a wrongful termination suit or collect unemployment insurance. As well, the severance agreement may include a noncompete clause, which could interfere with your ability to find a new job. Before accepting any severance package, read the severance agreement carefully and consult a lawyer if necessary. |
Related Definitions
Articles Of Interest
-
The Layoff Payoff: A Severance Package
If you must leave your job, go out fighting for the best benefits you can get. -
Layoff Protection Plans: Good Deal Or Gimmick?
If you get laid off, these plans can be of great value, but the best protection may be to avoid big purchases altogether. -
Choosing The Best Disability Insurance
Social Security benefits can be hard to collect. Find out why you need disability insurance to protect your income, and learn how to choose the right policy for you. -
Losing Your Job: From A To Z
Job loss can be devastating. Learn how to anticipate it and quickly get back on your feet. -
How To Lay Off Staff
Firing employees isn't easy, but it is simple: be honest, be compassionate and be quick -
Is my husband's ex-spouse entitled to receive my spouse's retirement benefits?
The rules vary among retirement benefits. In some cases, because you are the current spouse, you will be treated as the beneficiary by default. This would be so even if your spouse named someone ... -
If I take a severance package from my employer, how will it be taxed?
It depends on your tax bracket. For instance, if your employer offers you a payout of $100,000, you will owe federal tax of $35,000. You may also owe estate tax.It may be best to check with your ... -
Broker Commissions Are Here To Stay
With two developed nations adopting a firm anti-commission stance, questions have arisen over whether or not the United States should follow suit. Find out why such a development is unlikely. -
10 Great Summer Jobs For Teens
There are a lot of summer jobs out there, find out what's available, how much it costs and what skills you need. -
The Path To Becoming A CEO
Think you have what it takes to be chief executive? Find out what those at the top have in common.
Free Annual Reports
