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Understand the components of a severance package. Wait before signing paperwork. Read everything carefully. Get an expert opinion. Understand your priorities. Negotiate for more than money. Decide on a reasonable request. Leverage your success.

Starting a new job before your termination date would be the same thing. When you are being paid in lieu of working during your layoff notice period, you are still officially working for your company. And if you start a new job during your layoff notice period, it's as if you quit your current job and taken a new one.

From a tax perspective, the IRS views traditional severance payments as supplemental wages because they are not a payment for services. Severance paid to employees in lump sums, unrelated to state unemployment benefits SUBs, is taxable as wages for both income-tax withholding and FICA purposes.

Step 1: Articulate Your Goals. Step 2: Identify Compensation. Step 3: Determine Specific Waivers, Releases of Claims, Acknowledgments and/or Contractual Assurances to Include in the Agreement. Step 4: Arrange to Secure Employer-owned Property. Step 5: Draft the Agreement.

Continuation of insurance benefits, assistance finding another job, and other perks can also be negotiated as part of a severance agreement. Typical severance packages offer one to two weeks of paid salary for every year worked.

What should a severance package include? Your severance package should include information about your financial compensation under the agreementfor example, how much you will be paid and how it will be paidas well as how you will be compensated for your unused vacation and sick time.

Benefits in lump sum packages are usually terminated earlier than benefits offered under a salary continuance. With respect to a salary continuance severance package, the advantages include:Usually represents a larger total severance figure than a comparable lump sum offer.