Nyc Lawas As It Pertains To Severance Pay, What Is It Really And What Tax Rate?

[CHEENAH]

Offered A Severance Pay Pkg From Soon To Be Former Employer. I Have A Great Deal Of Years In (high Dbl Digits) With The Company.
The Amount They Are Offering Is Less Than A Year, And Considering What Cobra Cost, And The Taxes That Are Taken Out, What I Actually Will End Up With Is Peanuts. My Question Is This At What Tax Rate Do They Or Are They By Law To Tax Me At. If The Y Try To Use The Bonus Rate, THEN That Definitley Cuts The Amt In 1/2, And I Really Won't Have Anything? Please Advise... Also The More Years You Have In, Should Not The Pkg Be Bigger And Better!

[elklaw]

As a rule, 25% of the severance is withheld for federal taxes, but not knowing your pay or tax rate, and there are state taxes and maybe local taxes too, hard to say. The severance formula is what your company sets up, unless a public employer subject to laws covering that. So if you want a better severance package, go negotiate it. Tell them you want to accept it, but need a better package more reflective of your years of service. A standard is usually one month's pay per a year or service. Cobra is COBRA, so not much they can do about that, but you can maybe ask to be carried on the company health plan for 2-3 months to give you transition time. So I think you need to go negotiate a better deal for you.