2026 · Virginia
Virginia severance pay tax
Federal 22% plus Virginia's 5.8% supplemental rate. But neither is your real tax rate. Here's the real number.
Counts toward the $184,500 Social Security cap.
Wages, new job, spouse, sets your real tax rate.
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Virginia layoff at a glance
| State tax on severance | Flat 5.8% supplemental withholding |
| State income tax | Graduated, up to 5.8% |
| Unemployment weekly max | $478 for up to 26 weeks |
| Unemployment taxed by Virginia? | No |
How Virginia withholds on severance
Virginia withholds a flat 5.8% 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.
Virginia taxes income on a graduated scale topping out at 5.8%, so a large severance can be pushed into that top rate. If you also claim unemployment, Virginia pays up to $478 a week for up to 26 weeks, and does not tax it. That's the Virginia layoff picture in one place, the severance tax here, the unemployment on its own Virginia page.
Worked example: $40,000 severance in Virginia
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 |
| Virginia withholding | −$2,300 |
| Net check | $25,840 |
| What it actually costs in tax | $13,510 |
Over-withheld by about $650, 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 Virginia unemployment on top
Virginia sizes your weekly check off your recent wages, up to $478 a week, mid-pack nationally (32th of 51). There is no separate dependent add-on. Duration 12-26 by earnings; max $478 eff 2026-07-05.
| Weekly benefit range | $160 - $478 |
| How the amount is set | Off your recent wages |
| Maximum duration | 26 weeks (12-26 by earnings; max $478 eff 2026-07-05) |
| Waiting week | Yes, one unpaid week |
| Dependent allowance | None |
| Taxed by Virginia | No |
Stacked together, that $40,000 severance nets about $25,840 and Virginia's unemployment can add up to $12,428 over 26 weeks, about 10 months of a $4,000 budget before you need a paycheck. File through Virginia Employment Commission (VEC); nail down the exact figure in the runway calculator.
Questions about Virginia severance tax
Is severance taxed higher in Virginia?
No. It's withheld at a flat 22% federally and 5.8% by Virginia, but it's taxed as ordinary income at your normal rates. You settle up at filing.
Does Virginia tax my severance?
Yes, Virginia taxes severance as wages. Virginia withholds a flat 5.8% 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). Enter your numbers above to see which way it goes for you.
Your Virginia layoff toolkit
- Virginia unemployment benefits weekly amount and duration
- Runway calculator how long your money lasts
- Virginia paycheck calculator take-home at your next job
- Virginia 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.