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What does dismissal payments under secondary classification for elements stand for?

Received Response


Payroll experts - We have this need to understand how the tax percentage differs between our severance and our bonus payments.

These are 2 separate elements: However, the bonus is being taxed correctly at 22% federal and the severance is getting taxed at 37%. This is causing a lot of confusion for our business as the tax for severance can only be at 37% for over a million dollars of payment. Where would these percentages be set up?

The other difference we are seeing is that the secondary classification varies for both elements.

While the secondary classification for bonus is bonus, the one for severance is dismissal payments.

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