I received my severance payment today. I was surprised to see that it was taxed at a higher rate than my regular pay. Federal at 22% and State at about 10%. It would have been nice if this was called out in the IRIF Information Package. Payment was over $5K less than expected.
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The tax rate that you received for your unused vacation pay should match what they take from severance. BTW, how long did it take for your severance to come past the time you submitted the paperwork? Also, does anyone know how long it take to have the pension lump sums transferred to your brokerage? Thanks and good luck everyone.
This is not Xerox but rather the tax code to avoid any penalties at the end of the year for underpayments. If your tax rate for the year is less you’ll get it back in a refund.
Commission is taxed at a higher rate, too. You get withheld as if that amount is a regular paycheck.
It all comes out right at the end of the year.
It has been stated by others previously that a 3rd Party has been engaged to calculate and prepare the severance packages and that their calculations have been erroneous. Not sure if they are being additionally compensated for saving Xerox money. Be sure to check state laws as to what you are entitled to.
Awesome... I'll be getting mine shortly. I was guesstimating 35% total. Sounds like that's about right.