How much of a severance pay do we get to "take home"?

I want to mix it up a bit, and actually ask a legitimate question to those that have experience or just understand how it works better than I do.

Not related to a specific situation (meaning I don't want to hear opinions on who might or might not be getting it, and why and so on), but when a severance package is offered to an employee, what taxes and other fees are deducted from it? There will obviously be Federal and state taxes, in some areas local taxes, Social Security... anything else? Do they still take a 401k contribution percentage and move it into your 401k with match? What about health insurance or savings accounts? Do they treat it as a last pay check with all applicable deductions, or is it just taxed? And finally, I assume they send an actual check, or do they deposit it directly into your bank account?

I read the policy and didn't see any clarifications on these. I did see another point in there that was kind of interesting though:

"FORFEITURE OF BENEFITS BY KILLERS. Notwithstanding anything to the contrary in the
Plan, no payment of benefits will be made under any provision of the Plan to any
individual who ki-ls the Participant with respect to whom such amount would otherwise
be payable..."

WTF? Is this something that happens frequently enough for them to include a whole paragraph in the policy?

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Every employee's goal should be to make the wages from AT&T a small part of your earnings. Building a monthly income where AT&T wages is less than 25% of monthly income. I was suplused a few years ago but stayed on in another position and quickly moved to not relying on AT&T wages for a large part of my income. With rates very high there are many high-income investments with lower risk paying 8 to 12%. Having that stream has taken the worry out of Stankey's chaos for me

It’s income. It’s taxed as income. Don’t complicate things unnecessarily.

Don’t spend it or count on a severance. If you HAVE to count on a severance to make it financially you are hosed.

22%, plus a bit more for Medicare, SSI, and FICA.

Got it.

I mean, sure, it sucks, but it is what it is. Good to know.

22% withheld. Enjoy

Think that's actually 22% federal. Medicare, SSI, and FICA would also be withheld. State would depend on which state. Some states exempt only a portion. (e.g. Alabama exempts the first 50k) Not endorsing FDR, but here's an easy to read article summarizing.
https://www.freedomdebtrelief.com/learn/personal-finance/how-is-severance-pay-taxed/#how-is-severance-pay-taxed-in-the-us

ALso--Here is an example from a previous T occurrence. Some numbers and allowances will be different, but the same general policies may apply.
https://thinkfinance.io/oCQ4IGNL0m

"Because it is a lump sum, it is taxed at 20% Federal;"

So, flat 20% for by the Feds, and that's it? State stays out of it?

"Federal; you have to wait until next tax year to claim any overpayment in total taxes for a refund."

That's fine.

"The death clause is standard policy."

Sure, the death clause is also still there, but that was a separate one, talking specifically about someone ki-ling a participant, which I thought was a bit weird to see, especially since the death portion of the policy pretty much covers this kind of scenario anyway.

OMG - I saw that killers clause too and thought the same thing!!!

It is not a "last paycheck". It is paid within 45 days after the executed agreement not to sue, after your last day on payroll, so you are not an employee at that point.

Because it is a lump sum, it is taxed at 20% Federal; you have to wait until next tax year to claim any overpayment in total taxes for a refund. The death clause is standard policy.

Thread regarding AT&T layoffs

How much of a severance pay do we get to "take home"?

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