I received a back pay settlement check from my previous employer and not only did they take my normal taxes out but they took an additional 20%. Is this right?

I was wrongfully fired and took them to court, we agreed on a back pay settlement. When I got the check, not only did they take my normal payroll taxes out but they also took an extra 20%. I was never informed that they would/could do this.

1 answer  |  asked Apr 10, 2018 6:34 PM [EST]  |  applies to California

Answers (1)

George Allen
When an employer cuts a check for back pay and the amount is larger than your usual paycheck, the payroll software may automatically withhold at a higher rate as though you are in a higher tax bracket. If the settlement agreement did not specifically detail how withholding would be done it's probably too late to do anything about it. On the bright side, this will benefit you when you file your taxes next time.

posted by George Allen  |  Apr 11, 2018 10:08 AM [EST]

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