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Layoff Runway Calculator for Software Engineers

Calculate your real post-layoff runway — severance after tax withholding, unemployment benefits, COBRA vs marketplace health coverage, and realistic job-search timelines.

Updated Apr 19, 2026

Layoff Runway Calculator for Software Engineers

Most runway math people do in their head is wrong — usually optimistic by 25–40%. The reason is almost always the same three mistakes: forgetting that severance is taxed, forgetting that health insurance just got expensive, and assuming the job search will take as long as it took last time.

This calculator is designed to give you an honest number, not a comforting one.

What a realistic runway calculation looks like

Inputs that matter:

  • Severance (post-tax, not gross). If your package says “12 weeks at base salary,” that’s the gross number. Federal withholds 22% as supplemental wages (37% over $1M), add state, add FICA. Your actual bank deposit is usually 30–40% lower than the headline.
  • PTO / unused vacation payout. Same supplemental-wage treatment. In some states it’s mandatory; in others it depends on your contract.
  • Unemployment benefits. Rules vary wildly. California caps at $450/week. Washington around $1,079/week. New York $504. File immediately — benefits don’t backdate. Most states have a 1-week unpaid waiting period. If your severance is paid as a lump sum (not salary continuation), you usually qualify for UI right away; if it’s salary continuation, UI often starts when continuation ends.
  • Health coverage. COBRA keeps your current plan at the full employer+employee cost (often $700–1,800/month for a family). The ACA marketplace, at reduced post-layoff income, usually qualifies you for subsidies that cut that by 60–80%. Loss of employer coverage is a qualifying life event — you have 60 days to enroll without waiting for open enrollment.
  • Fixed monthly burn. Rent/mortgage, utilities, debt minimums, childcare, insurance. This is the floor you can’t cut fast.
  • Variable burn. Food, subscriptions, travel, eating out. Typically 30–50% of total spend; the first thing to trim.

The formula is simple: (severance post-tax + UI benefits + cash reserves) ÷ (fixed burn + health coverage + minimum variable burn) = months of runway. The discipline is in being honest about each input.

Common mistakes

  1. Forgetting COBRA/ACA entirely. Your employer was quietly paying $600–1,400/month for your health coverage. Starting month 1, that’s on you.
  2. Using gross severance. If you budget against the offer letter number and not what actually lands in your account, you’re about 30% too optimistic.
  3. Assuming last search duration. Tech hiring has gotten substantially harder since 2022. A search that took 6 weeks in 2021 might take 3–4 months in 2026 at the same seniority.
  4. Ignoring unemployment entirely. Even at the federal minimum, UI is several hundred dollars a week. Many engineers skip filing because “the paperwork is annoying” — that’s often $10–20K of foregone benefit.
  5. Not pricing in interview travel or paid mock platforms. Small, but real — especially for senior roles with multi-day onsites.

When to consider contract work

If your runway comes back under 4 months, contract or contract-to-hire is worth a serious look — not because it’s strategically ideal, but because it converts uncertainty to cash flow. Rule of thumb: if your runway is under 3 months, start applying to contracts in parallel with full-time. If it’s 6+ months, you can afford to hold out for the right full-time offer.

Financial stress is the single biggest driver of bad job-search decisions — accepting the first offer, skipping negotiation, panic-applying to 200 roles in a week. A realistic runway number isn’t just a budget; it’s a decision horizon. When you know you have 7 months, you interview differently than when you think you have 3.

Start your search with GitReady → /

Frequently asked questions

How is severance actually taxed?
In the US, severance is taxed as supplemental wages — your employer typically withholds a flat 22% federal (37% for amounts over $1M), plus state, plus FICA. That can leave your actual take-home 30–40% below the headline number on the offer letter. Plan the runway against post-tax, not gross.
Is COBRA worth it, or should I use the ACA marketplace?
Almost always the marketplace, unless you have a mid-year deductible you've already paid down or are in active treatment. COBRA is the same plan at full cost (you pay what your employer was paying, ~$700–1,800/mo for families). Marketplace subsidies at reduced post-layoff income often cut that by 60–80%. Run both numbers — the calculator does it for you.
What's a realistic job-search timeline in 2026?
For mid-level SWEs with a solid resume and 3–5 years of experience, the current median is around 3–4 months from first application to signed offer. Senior and staff roles skew to 5–7 months. Plan runway against the pessimistic end of that range, not the median.