2026 · North Dakota
North Dakota severance pay tax
Federal 22% plus North Dakota's 1.5% supplemental rate. But neither is your real tax rate. This works out what you owe.
North Dakota layoff at a glance
| State tax on severance | Flat 1.5% supplemental withholding |
| State income tax | Graduated, up to 2.0% |
| Unemployment weekly max | $815 for up to 26 weeks |
| Unemployment taxed by North Dakota? | Yes |
How North Dakota withholds on severance
North Dakota withholds a flat 1.5% on supplemental wages like severance. On top of that, the federal government withholds a flat 22% (37% over $1 million) and FICA, 6.2% Social Security up to the $184,500 wage base plus 1.45% Medicare.
North Dakota taxes income on a graduated scale topping out at 2.0%, so a large severance can be pushed into that top rate. If you also claim unemployment, North Dakota pays up to $815 a week for up to 26 weeks, and taxes it on the state return. That's the North Dakota layoff picture in one place, the severance tax here, the unemployment on its own North Dakota page.
Worked example: $40,000 severance in North Dakota
A single filer, $40,000 severance paid separately, with $60,000 of other 2026 income:
| Federal withholding (22%) | −$8,800 |
| FICA (Social Security + Medicare) | −$3,060 |
| North Dakota withholding | −$600 |
| Net check | $27,540 |
| What it costs in tax | $11,950 |
Over-withheld by about $510, expect roughly that back as a refund at filing. The withholding is a fixed rate; your actual tax is your marginal rate on the severance stacked on your other income.
Stacking North Dakota unemployment on top
North Dakota sizes your weekly check off your recent wages, up to $815 a week, one of the more generous in the country (9th of 51). There is no separate dependent add-on. Duration 12-26; schedule 7/6/2025-7/4/2026.
| Weekly benefit range | $43 - $815 |
| How the amount is set | Off your recent wages |
| Maximum duration | 26 weeks (12-26; schedule 7/6/2025-7/4/2026) |
| Waiting week | Yes, one unpaid week |
| Dependent allowance | None |
| Taxed by North Dakota | Yes |
Stacked together, that $40,000 severance nets about $27,540 and North Dakota's unemployment can add up to $21,190 over 26 weeks, about 12 months of a $4,000 budget before you need a paycheck. File through Job Service North Dakota; nail down the exact figure in the runway calculator.
Questions about North Dakota severance tax
Is severance taxed higher in North Dakota?
No. It's withheld at a flat 22% federally and 1.5% by North Dakota, but it's taxed as ordinary income at your normal rates. The worked example on this page shows the gap in dollars: on a $40,000 severance, $8,800 of federal tax is withheld up front while the severance actually costs about $11,950 in tax for that filer. Whichever direction the gap runs, it settles up at filing, a refund if too much was taken, a bill to plan for if too little.
Does North Dakota tax my severance?
Yes, North Dakota taxes severance as wages. North Dakota withholds a flat 1.5% on supplemental wages like severance.
Will I get a refund or owe more?
It depends on your bracket. The flat 22% over-withholds for lower earners (refund) and under-withholds for those in the 32 to 37% brackets (set aside the difference). The crossover sits where your marginal rate passes 22%: below it, every severance dollar was over-withheld and comes back; above it, the flat rate quietly under-collects and the difference lands on your return as a balance due. For the $40,000 example on this page with $60,000 of other income, the calculator's verdict is printed under the worked example. Enter your numbers above to see which way it goes for you.
Your North Dakota layoff toolkit
- North Dakota unemployment benefits weekly amount and duration
- Runway calculator how long your money lasts
- North Dakota paycheck calculator take-home at your next job
- North Dakota 1099 tax if you go freelance
An estimate for the 2026 tax year. State supplemental figures from the verified dataset, last verified 2026-07-24. Nothing you enter is stored. Not tax advice.