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Before You Answer a Buyout Offer

What to check on the money side of an offer to leave, before the deadline.

I’m Mateo Dellovo, a fiduciary adviser for people paid in company stock. When a company offers you money to leave on your own by a deadline, that’s an employee buyout offer. This page covers the money side of that decision and the questions to answer before you make it.

Microsoft’s Voluntary Exit Offer

From Microsoft’s memo to employees of October 26, 2026, as reported that day.

  • Microsoft’s chief people officer, Amy Coleman, announced it in a memo to employees on October 26, 2026
  • It covers about 60,000 people in participating teams in the U.S., Canada, the U.K. and India, at level 70 and below on Microsoft’s internal scale
  • Business leaders decide whether their teams take part
  • There is no age or tenure requirement
  • Microsoft says the package is equivalent to its standard severance, with base pay based on tenure and level, continued stock vesting, health coverage for a fixed period and career transition services
  • Employees were given until the first week of December to decide

Two decisions

The first is whether to go. That one is yours. Your work, your team, and what the next year looks like if you stay.

The second is what the money and the stock do once you decide. That one is math, dates and taxes, and it can change the answer to the first.

Severance is pay

The IRS treats severance as wages, with Social Security, Medicare and federal income tax withholding. When it is paid apart from your regular pay, your employer can withhold federal income tax at a flat 22%. On supplemental pay above $1 million in a year, the rate is 37%. If you owe more than was withheld, the difference is still due, and the IRS says you might have to pay estimated tax during the year. State tax, where your state has one, comes on top.

The year it lands in

A package paid near the end of one year, or at the start of the next, can change which year’s tax bracket it falls into. Ask when each payment is made, along with how much.

Stock that keeps vesting, and stock that stops

How long stock keeps vesting under the package, and what happens to anything scheduled after that, is in your own offer. Each RSU is taxed as pay when the shares are delivered, usually the day it vests, whether you keep the shares or sell them. Anything you would give up by leaving is part of what the offer costs.

The paycheck ends. The stock may not.

If a large part of what you own is stock in the company you are leaving, the income that came with it stops and the concentration stays. How much to keep is your decision. It can help to make it on purpose.

Health coverage has an end date

Know the date it stops and what comes after it.

Your 401(k)

The vested part stays yours. What you do with it has its own choices and rules, and they don’t all have to be made in the same week as the first decision.

Questions to answer before you decide

  1. What is the package worth after federal and state tax, and when is each payment made?
  2. Which tax year does each payment land in?
  3. Which grants keep vesting under the package, until when, and which stop?
  4. What was withheld on recent vests and on the severance, and what might you owe in total?
  5. How much of what you own is your company’s stock, and how much do you want there once the paycheck ends?
  6. When does health coverage end, and what replaces it?
  7. What are your choices for your 401(k), and do any have a deadline?

Your next step

If you want a second set of eyes before your deadline, book a free 15 minute Checkup.

Book your free Checkup

Sources. Microsoft memo of October 26, 2026, as reported by GeekWire and The Next Web. IRS Publication 15 (2026). IRS Publication 505 (2026). IRS Publication 5992. Treas. Reg. 31.3402(g)-1.

The Microsoft box reflects the memo as reported on October 26, 2026. Terms can change, so confirm yours in your own offer. BFA Wealth Management isn’t affiliated with Microsoft.

Mateo also holds a Florida real estate license and has outside real estate businesses, which can create conflicts. See our Form ADV.