# Severance Pay

*Retirement & Benefits — Finicade finance glossary*

Severance is compensation paid on termination, commonly framed as a number of weeks per year of service. It's taxable as ordinary income and typically withheld at supplemental rates. The negotiable parts are usually not the headline amount: continued health coverage, accelerated vesting of equity, the reference and the non-compete are frequently more valuable and more movable than the extra week of pay.

**Also known as:** redundancy pay, severance package, termination pay

**Related terms:** [COBRA](https://finicade.com/glossary/cobra), [Vesting](https://finicade.com/glossary/vesting), [Deferred Compensation](https://finicade.com/glossary/deferred-compensation), [Withholding](https://finicade.com/glossary/withholding), [Emergency Fund](https://finicade.com/glossary/emergency-fund)

Source: https://finicade.com/glossary/severance-pay