severance pay: meaning, definition, pronunciation and examples
B2Formal, Business, Legal, HR
Quick answer
What does “severance pay” mean?
A lump-sum payment made by an employer to an employee upon termination of employment, often in lieu of notice.
Audio
Pronunciation
Definition
Meaning and Definition
A lump-sum payment made by an employer to an employee upon termination of employment, often in lieu of notice.
Compensation provided to an employee when their job is eliminated, typically due to redundancy, downsizing, or position elimination, not due to employee misconduct. It may be offered voluntarily by an employer or mandated by law/contract.
Dialectal Variation
British vs American Usage
Differences
The term is standard in both varieties. In British English, 'redundancy pay' is a more common near-synonym for statutory payments, but 'severance pay' is widely understood.
Connotations
Similar legal/business connotations in both regions.
Frequency
Slightly more frequent in American English, where 'redundancy pay' is less common.
Grammar
How to Use “severance pay” in a Sentence
[Employee] received severance pay.[Company] offered severance pay to [employee].The severance pay was based on [years of service].Vocabulary
Collocations
Examples
Examples of “severance pay” in a Sentence
verb
British English
- The company agreed to severance him with a generous package.
American English
- They decided to severance the long-time manager.
adjective
British English
- The severance package was discussed in the tribunal.
American English
- She reviewed the severance agreement with a lawyer.
Usage
Meaning in Context
Business
Standard term in HR and management discussions about workforce reduction.
Academic
Used in economics, labour law, and business studies papers.
Everyday
Used by employees discussing job loss or news reports about company layoffs.
Technical
A precise term in employment law and corporate contracts.
Vocabulary
Synonyms of “severance pay”
Strong
Neutral
Weak
Vocabulary
Antonyms of “severance pay”
Watch out
Common Mistakes When Using “severance pay”
- Using 'severance pay' to refer to a final regular salary payment or unpaid vacation payout.
- Spelling as 'severence pay'.
- Using it for voluntary resignation.
FAQ
Frequently Asked Questions
No. A final paycheck is for hours worked and accrued vacation. Severance pay is additional compensation for the loss of the job itself.
In most jurisdictions, it is not universally required by law unless stipulated in an employment contract, collective bargaining agreement, or company policy. Some laws mandate it for large-scale layoffs.
Yes, in most countries, including the US and UK, severance pay is generally considered taxable income.
Yes, employees can often negotiate the terms of a severance package, especially if they have significant seniority or are in a key role.
A lump-sum payment made by an employer to an employee upon termination of employment, often in lieu of notice.
Severance pay is usually formal, business, legal, hr in register.
Severance pay: in British English it is pronounced /ˈsev.ər.əns ˌpeɪ/, and in American English it is pronounced /ˈsɛv.ɚ.əns ˌpeɪ/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “A golden parachute (specifically for executives).”
Learning
Memory Aids
Mnemonic
Think: SEVERance pay is given when you are SEVERed from the company.
Conceptual Metaphor
COMPENSATION IS A BRIDGE (to the next job). EMPLOYMENT IS A CONNECTION (severance pay is given when the connection is severed).
Practice
Quiz
In which situation is 'severance pay' MOST likely to be paid?