When released from employment, employers are required to pay the released individual all earned wages. However, that is all that is required by law. Payments in addition to that are called severance. A severance package can contain many different things including insurance, a bonus lump sum, electronics or stocks. Employment severance is generally created in the initial contract negotiations for the employee. In times of financial downfall, severance packages are sometimes offered to entice employees to resign and save the company money. If severance is granted through continued payments, it is taxed and can sometimes void unemployment checks. Taxation can be reduced through other methods of severance.