How to Negotiate a Severance Package

Learn to negotiate severance pay, benefits continuation, and other terms when losing your job.

Understand what's typically negotiable. Most companies will negotiate severance pay duration, benefits continuation (COBRA), outplacement services, and reference terms. They rarely budge on stock vesting, non-compete clauses, or admission of wrongdoing. Focus your energy on the money and benefits that directly impact your finances.
Calculate your minimum acceptable offer. Figure out how much runway you need before negotiating. Add up 3-6 months of expenses, factor in your emergency fund, and estimate realistic job search time for your field. This gives you a baseline to evaluate any severance offer against your actual financial needs.
Identify your leverage points. Your negotiating power comes from institutional knowledge, client relationships, pending projects, or potential legal issues with your termination. Companies pay more to avoid disruption, knowledge loss, or legal risk. Don't threaten, but do highlight what value you're walking away with.
Ask for time to review the initial offer. Never accept or reject a severance package immediately. Request 24-48 hours to review the terms, even if the offer seems generous. This shows you're taking it seriously and gives you time to spot improvement opportunities without seeming ungrateful.
Negotiate benefits continuation alongside cash. COBRA health insurance can cost $400-800 monthly for individuals or $1,200-2,000 for families. Ask the company to pay COBRA premiums for several months instead of just offering more cash. This gives you better value and shows you're thinking practically, not just grabbing money.
Get everything in writing before you sign. Verbal promises don't count in severance negotiations. Review the written agreement carefully for payment schedule, tax treatment, and any strings attached. If significant money is involved or the terms seem complex, spend a few hundred dollars to have an employment lawyer review it.