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How to setup retiring hourly employee's payroll to receive severance payments
We have an hourly 63 yr old employee that is retiring in December. We negotiated a separation agreement where he will be receiving payments (weekly or monthly) for severance pay and also an amount to help him pay for his health premiums under his new personal Jan 1 - 2015 health policy. Basically helping him make the transition from full-time Payroll w/ company paid health insurance ... over to Medicare in 18 months.
I know he has to pay payroll taxes but is there any legal way we can set this up so we don't have to pay the matching SS & MED tax %s. Maybe set him ups a subcontractor and give him a 1099?
Andrew Roach
President
Drew Telecom Group, Inc
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