Severance Pay Calculator — Texas

Severance Pay Laws in Texas

Texas is one of the most employer-friendly states in the country when it comes to terminations. It is a pure at-will jurisdiction with no statutory severance pay mandate for individual or group layoffs. The only federal floor that applies is the WARN Act, which requires sixty days of advance notice for mass layoffs of fifty or more employees at companies with one hundred or more total employees. Texas has not enacted a state-level mini-WARN to supplement that floor, so workers below the federal threshold rely almost entirely on what their employer chooses to offer and what they can negotiate against the release of claims their employer wants signed.

Texas also stands out for what it does not have: a state income tax. For employees calculating the after-tax value of a severance offer, the absence of a state income tax meaningfully increases take-home dollars compared to the same nominal package paid in California, New York, or Oregon. That difference can be material at higher salary bands, especially for executives and senior individual contributors negotiating in tech, finance, or energy.

Final wages in Texas are governed by the Texas Payday Law (Chapter 61 of the Labor Code). When an employer terminates an employee involuntarily, all earned wages, including any accrued vacation that is payable under company policy, must be paid by no later than the sixth day after the date of termination. Voluntary resignations are paid out on the next regularly scheduled payday. The Texas Workforce Commission enforces the statute and can recover both unpaid wages and administrative penalties.

On non-competes, Texas applies the Business and Commerce Code §15.50 framework: a non-compete is enforceable only if it is ancillary to or part of an otherwise enforceable agreement, and the time, geographic area, and scope of activity restricted are reasonable. Texas courts will reform overbroad clauses rather than strike them, which makes non-competes more enforceable here than in California — but they are still tested for reasonableness. Trade-secret protections under the Texas Uniform Trade Secrets Act run alongside contract law and cover the same conduct as a typical employer-protective non-disclosure clause.

For employees forty and over signing a separation agreement, the federal Age Discrimination in Employment Act provides a 21-day review window (45 days for group layoffs) and a 7-day revocation period after signing. Texas courts respect ADEA standards but layer no additional state requirement, so the federal framework is the practical floor. The Texas Commission on Human Rights Act tracks Title VII for state-law discrimination claims and applies to employers with fifteen or more employees.

How Much Severance Are Texas Workers Owed?

Texas employers in energy, tech, and finance typically offer two to three weeks of severance per year of service for individual contributors and meaningfully more for managers and directors, with executive packages often including equity acceleration. Smaller employers and retail / hospitality come in lower, sometimes at one week per year or less. Because Texas has no statutory severance floor, what is offered is what is offered — the leverage lives entirely in the release.

LayoffMath surfaces the dollar gap between what employers in your role-and-tenure profile typically pay and the offer in front of you. In Texas, the absence of state income tax means the gross-to-net delta is smaller than in many high-tax states, so the same nominal gap is worth slightly more in your pocket.

Industry Benchmarks for Texas

In Texas, energy and tech typically pay above the modeled midpoint; retail and hospitality come in below.

Frequently Asked Questions — Texas Severance