← Remote Work Glossary

Severance Pay

Compensation an employer provides to an employee when their job is terminated, often based on tenure.

Severance is money (and sometimes continued benefits) paid when someone is let go, typically through no fault of their own — for example in a layoff. The amount often scales with how long you were there, and in many countries a minimum is required by law.

Severance rules vary widely across borders, which matters on international teams. In the US, at-will employment means it is often discretionary, whereas many other countries mandate it.