Meaning of the word "severance pay" in English

What does "severance pay" mean in English? Explore the meaning, pronunciation, and specific usage of this word with Lingoland.

severance pay

US /ˈsev.ər.əns peɪ/
UK /ˈsev.ər.əns peɪ/
"severance pay" picture

Noun

money paid by an employer to an employee whose job the employer has had to bring to an end

Example:
The company offered him a generous severance pay package after ten years of service.
He is entitled to three months' severance pay.