How is severance taxed in Washington?

Washington has no state income tax, so only federal taxes apply: 22% federal supplemental withholding (37% above $1,000,000 cumulative for the year), plus FICA. WA Cares (the 0.58% long-term care premium) applies to wages earned during employment but generally not to severance paid after separation — confirm with your employer's payroll.

Does Washington Paid Family and Medical Leave (PFML) apply to severance?

PFML premiums are deducted from regular wages, not from severance pay. Notably, Washington's mini-WARN Act prohibits including employees who are on PFML leave in a mass layoff. Receiving severance does not affect your ongoing PFML benefit eligibility, though state rules treat severance as wages for some purposes — check with the Washington Employment Security Department.

Does Washington unemployment treat severance as income?

Severance paid as a lump sum generally does not delay Washington unemployment benefits. Severance paid as "wages in lieu of notice" may delay benefits dollar-for-dollar during the notice period. Apply when you separate and disclose the severance details.

When did Washington Mini-WARN take effect and what does it cover?

Washington Mini-WARN was enacted as SB 5525 in 2025 and took effect on July 27, 2025. It applies to private employers with 100 or more full-time employees and requires 60 days advance written notice to affected employees, the Washington Employment Security Department, and local elected officials before a mass layoff (50+ affected at a single site over 30 days) or business closing. The notice obligation runs parallel to federal WARN — meeting one generally meets the other for events with overlapping scope.

Does Washington Paid Family and Medical Leave (PFML) interact with severance?

PFML premiums (0.74% of wages, split between employee and employer) are deducted from regular wages during employment. Severance paid after separation generally is not subject to PFML premiums. Eligibility for PFML benefits is based on hours worked in the qualifying period (820 hours in the four most recent completed calendar quarters); receiving severance does not reduce that eligibility. File a PFML claim directly with the Washington Employment Security Department if you need leave benefits after layoff.

Washington Severance — No State Tax, WA Mini-WARN, 2026

Q: Does Washington have a mini-WARN Act?

Yes, as of July 27, 2025. Washington's "Securing Timely Notification and Benefits for Laid-Off Employees Act" (SB 5525) covers employers with 50 or more full-time employees and requires 60 days advance written notice for any mass layoff or business closing affecting 50 or more employees in a 30-day period. Unlike federal WARN it has no percentage-of-workforce threshold, so smaller cuts at large employers can trigger it. Penalties include up to 60 days back pay per affected employee, $500/day civil penalties payable to the Washington Employment Security Department, and attorneys' fees.

By Severance Calculator Editorial · Updated May 12, 2026

Washington WARN: what applies

Washington has both a state mini-WARN Act (effective July 27, 2025, SB 5525) and federal WARN. The state Act applies to employers with 50 or more full-time employees in Washington and requires 60 days advance written notice before any mass layoff or business closing affecting 50 or more employees in a 30-day period. Unlike federal WARN there is no percentage-of-workforce threshold. Notice must go to the affected employees (or their bargaining representative) and the Washington Employment Security Department. Penalties for non-compliance include up to 60 days back pay and benefits per affected employee, daily civil penalties up to $500 payable to ESD, and attorneys' fees.

How severance is taxed in Washington

Washington has no state income tax. Your severance is subject only to federal supplemental withholding (22%, or 37% on amounts above $1,000,000 cumulative for the year) and FICA. Note: WA Cares (a 0.58% long-term care premium) applies to wages but not to severance paid after separation.

Calculate your situation

Inputs default to Washington; adjust to your specifics.

Your situation

Role level

Years of tenure

Base salary ($)

State of employment

Age

Severance benchmarks

Typical benchmark

$24,519

7.5 weeks · methodology: benchmarks are derived from publicly reported severance norms across us corporate layoffs. weeks/year scale with role level; tenure <1 year gets a floor; cap at 52 weeks. these are negotiation reference points, not promises.

Band	Weeks	Gross
Typical	7.5	$24,519
Good	12.5	$40,865
Aggressive	20.0	$65,385

Tax breakdown (typical band)

Gross	$24,519
Federal supplemental	−$5,394
State supplemental	−$1,618
FICA — Social Security	−$1,520
FICA — Medicare	−$356
FICA — Additional Medicare	−$0
Net cash	$15,631

WARN Act

Not a group layoff

OWBPA review window

Individual exit (21-day review window) under the Older Workers Benefit Protection Act, plus 7-day revocation right.

Review window: 21 days · Revocation: 7 days after signing

COBRA cost

Monthly: $0

Annual: $0

Enter your employer-side monthly premium for an estimate.

Equity at termination

Forfeited unvested: $0

ISO exercise window post-termination: 90 days

ISO holders: you typically have 90 days post-termination to exercise vested ISOs before they convert to NSOs.

FAQ

Does Washington have a mini-WARN Act?: Yes, as of July 27, 2025. Washington's "Securing Timely Notification and Benefits for Laid-Off Employees Act" (SB 5525) covers employers with 50 or more full-time employees and requires 60 days advance written notice for any mass layoff or business closing affecting 50 or more employees in a 30-day period. Unlike federal WARN it has no percentage-of-workforce threshold, so smaller cuts at large employers can trigger it. Penalties include up to 60 days back pay per affected employee, $500/day civil penalties payable to the Washington Employment Security Department, and attorneys' fees.
How is severance taxed in Washington?: Washington has no state income tax, so only federal taxes apply: 22% federal supplemental withholding (37% above $1,000,000 cumulative for the year), plus FICA. WA Cares (the 0.58% long-term care premium) applies to wages earned during employment but generally not to severance paid after separation — confirm with your employer's payroll.
Does Washington Paid Family and Medical Leave (PFML) apply to severance?: PFML premiums are deducted from regular wages, not from severance pay. Notably, Washington's mini-WARN Act prohibits including employees who are on PFML leave in a mass layoff. Receiving severance does not affect your ongoing PFML benefit eligibility, though state rules treat severance as wages for some purposes — check with the Washington Employment Security Department.
Does Washington unemployment treat severance as income?: Severance paid as a lump sum generally does not delay Washington unemployment benefits. Severance paid as "wages in lieu of notice" may delay benefits dollar-for-dollar during the notice period. Apply when you separate and disclose the severance details.
When did Washington Mini-WARN take effect and what does it cover?: Washington Mini-WARN was enacted as SB 5525 in 2025 and took effect on July 27, 2025. It applies to private employers with 100 or more full-time employees and requires 60 days advance written notice to affected employees, the Washington Employment Security Department, and local elected officials before a mass layoff (50+ affected at a single site over 30 days) or business closing. The notice obligation runs parallel to federal WARN — meeting one generally meets the other for events with overlapping scope.
Does Washington Paid Family and Medical Leave (PFML) interact with severance?: PFML premiums (0.74% of wages, split between employee and employer) are deducted from regular wages during employment. Severance paid after separation generally is not subject to PFML premiums. Eligibility for PFML benefits is based on hours worked in the qualifying period (820 hours in the four most recent completed calendar quarters); receiving severance does not reduce that eligibility. File a PFML claim directly with the Washington Employment Security Department if you need leave benefits after layoff.

Glossary
WARN Act
Glossary
COBRA
Glossary
RSU
Scenario
RSU treatment at layoff
Company
Microsoft severance benchmark