How I’m Earning More from my Severance Package
24 August 2007
by
Jb
Filed under
Debts + PPP
Earlier this summer, I wrote about how I was reorganized out of a job after my company was purchased. Of course I wasn’t that upset as I’d already been searching for a new job, so this was a good motivator for me to get moving on that search. What made things easier was the severance package I received:
- 8-weeks of my regular pay,
- a “don’t sue us” bonus of another 4 weeks pay,
- plus a pro-rated portion of my semi-annual bonus.
I was told that my bonus payment would actually be a lump sum payment, which was a tad annoying, since that would mean I would lose quite a bit of money in taxes. A bonus payment is considered supplementary income by the federal government, which meant I would lose almost 40% of the money. I was pleasantly surprised to see last Friday that my former company has actually decided to split the money into an even number of payments, which means I only lose the amount of taxes on that small amount, as opposed to a larger portion of the larger amount. This lets me pay off more of my debt (not that I’ve been doing much of that, witness my previous post on how much my debt increased.)
My savings accounts are still doing well though, as I put them on automatic a few months ago. What’s even better is that one of my banks is increasing it’s interest rate, which will earn me more money in the long run.
And in two weeks I get my first pay cheque from my new job.
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