The joke of a company that is AT&T sc--wed up my severance payout! Laid off on 11/6, deferred severance for tax purposes, all literature said deferred severance, will be paid in March. Payment is pending into my direct deposit since Friday, and will be final on February 6. I cannot check a paystub because they switched to a new system and they don’t give former employees access to their own paystub! They took out 47% of my payment, which is obviously wrong and outrageous. AT&T could sc--w up a one car funeral! I’m actually relieved I'm out of that sh&th&le of a company!
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It seems like they just took out the top rate, 37% for Federal. Then they would take out your State withholding rate, then 6.2% for Social Security, and 1.45% for Medicare. There might be something else small in there too.
T would rather pay IRS than their own employees. Wonder why?
I know for a fact from several other coworkers who did not defer their severance that they were not nailed at the higher tax rates, only the 22%. My guess is the new payroll software fu---d it all up! So typical of this sh-t company, so glad I am gone!
The documents I received state that “Severance payments are typically taxed at a flat rate of 22% for Federal tax rate”.
My payment was taxed at 32%.
The “typically taxed” in the document is their get out of jail free card, unfortunately…
We were told severance would NOT be taxed like a bonuse but rather at your normal pay rate tax rate. They lied of course unless this is all a YUGE F UP again for T
People replying to this post talking about 401k contributions being taken from severance have NOT read ATT terms of severance. ATT expressly tells ALL terminated employees that ONLY taxes will be withheld AND at what rates.
You matter.
Severance is usually 22% IF it's routed as supplemental income. However, if it's run as ordinary income, combined with being a lump sum, it will be taxed at a much higher rate. Also, it may well have had 401k taken out. I know that when bonuses come around, I get only about 55-57% of what I was quoted after the higher tax rate and my 401k is taken out.
Aside--years ago they ran bonus pay as a separate payment so that it didn't negatively affect the regular pay for that period. But when they started running it with the pay period, it resulted in not only the bonus, but the regular pay check amount taking the hit of the higher tax rate.
The amount they took out is probably correct. In addition to all your taxes you’ll have your insurance that comes out and possibly 401(k) if you didn’t stop it. Insurance is gonna su-k a lot of money out of the check.
Anyone saying 50% withholding is correct is either lying or a fool or a shill for Biden. The total withholding should NOT exceeded 35%. It’s even spelled out in ATTs own severance material. New payroll system is something only an id--t would install.
Pro Tip: Stop voting for people that have insatiable spending habits. Doesn't matter what letter is next to their name since it's one big party anyway. Get some new blood in office that will be financially responsible. I won't even go into how messed up our election systems are since that will probably trigger half of you. Until then, this never ends.
Severance is always taxed that high!
Can they blue bat?
Stop being so naive
Social Sec is 6.2% and Medicare is 1.45%. Cant get around those. Add in State tax, if any. Fed tax rate will always be higher because of the severance lump sum is huge and higher in the tax brackets, but you will get the correct amount back when you file your tax return next year. Inconvenient, but thats how the gov'ment rolls.
You will be taxed at highest bracket for any lump sum amounts. You can recuperate the extra taxes withheld when you file your tax return for the year you were paid in.
where in the literature does it say 22%?
The literature on severance says should only be taxed at the federal rate of 22% not the 32% tax bracket that I ended up in. Spoke to several in payroll, they had no clue and I got disconnected three times. Also is a joke that you have to fill out a form to get your paystub.
also when you talk to HR and Payroll, you can request a form to send back to Payroll to get a copy of the check stub
same here, just off the phone with HR and Payroll, they took 49% of mine for Fed Tax, State Tax, Medicare and SS....yep, the MAN is super happy for our severances...Just expect to ONLY get around 50% of what the estimate provided to you is....it's legit unfortunately
And by "they" you mean the govt took 47% of your severance - right?
That is so messed up!