Any tax or finance people here? At what payroll tax rate is severance taxed in California. I am interested in the Federal Tax Rate and State Tax rate for the severance payments we may be getting. I am in a financial bind and every penny will be important if I get the axe (I kind of feel my job is on the chopping block this time).
Thanks in advance!
it's complicated and depends on the amount of severance.
the system will take the check and will assume that the check x 26 is your annual salary and that will determine the tax rate.
so, if you get 10k, the system will assume you are making 260k/year and will take in consideration your deductions and will apply the appropriate the tax rate (in this case probably the max rate for both state and fed)
not a finance person but this is how it was expalined to me
Not a tax or finance person, but our severance is paid out as a bi-weekly check, just like your regular check. I suspect the tax should be similar.