[irjustin]

You're right, but only if it's in the employment contract. It's not a legal requirement to have one to hire someone [0].

Way more commonly, severance is part of a termination contract, and thus it would not be here.

[0] https://www.dol.gov/general/topic/wages/severancepay

[pasc1878]

And I think some of the severance pay is tax free at least in the UK.