A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:
- An additional payment based on months of service
- Payment for unused vacation time or sick leave.
- A payment in lieu of a required notice period.
- Medical, dental or life insurance
- Retirement (e.g., 401K) benefits
- Stock options
- Assistance in searching for new work, such as access to employment services or help in producing a résumé.
Severance packages are most typically offered for employees who are laid off or retire.
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