People really don’t think through their money

[ETBen]

I am driving the HR lady nuts at work. After our merger, many of us are getting a combination of lump sum bonus, commuting incentive, and relo packages. And apparently no one else asked all of these questions of what comes in a separate payment vs in regular pay schedule. Will it be taxed as a bonus or regular income. Will payroll take 401k contributions out of it.

Granted, no one receiving these should be living paycheck to paycheck. But come on, people!  I may be a little Type A about this. But I also want to make sure I know what’s coming so that nothing is missed.

[Threshkin]

Keep asking.  This is exactly what your HR representative should know.  If they don't, they should have a Payroll person there as well.

[terran]

Do you think that by asking you'll be able to change the outcome in your and your coworker's favor, or are you just curious what will happen? If this is a way of negotiating because you think they haven't decided and you can effect the outcome then keep at it, but if everything is already set in stone and you're just asking so you know what will happen, then just drop it unless having the information will change something you need to do before the merger (change 401(k) elections so you don't go over the max or something).

[smalllife]

Do you think that by asking you'll be able to change the outcome in your and your coworker's favor, or are you just curious what will happen? If this is a way of negotiating because you think they haven't decided and you can effect the outcome then keep at it, but if everything is already set in stone and you're just asking so you know what will happen, then just drop it unless having the information will change something you need to do before the merger (change 401(k) elections so you don't go over the max or something).

No, definitely keep asking.  Chances are HR and payroll weren't the ones deciding and it will be a last minute decision (for better or worse) to get in under the deadline unless you force them to answer you before the payments.   Give your preference with the questions, and the reason.  Chances are you can sway it, assuming no one is proactively taking charge on the company's end.  Given your continued questions, I would say it's not.   The decisions for what should be done generally get decided by the C-suite, who hand generalities to HR/payroll but don't give them enough details to follow through until someone pushes the issue.

Good on you for questioning!  Plus, you are probably saving the payroll person a headache or two the day before it's due :-)

[Imma]

Ask payroll. They will be happy they're getting some input from someone who knows what they're talking about. Skip HR of you can, usually they don't know anything about payroll and don't care.

Source: I am a payroll admin.

[Catbert]

Ask payroll. They will be happy they're getting some input from someone who knows what they're talking about. Skip HR of you can, usually they don't know anything about payroll and don't care.

Source: I am a payroll admin.

+1.  Source: retired HR

[ETBen]

Ask payroll. They will be happy they're getting some input from someone who knows what they're talking about. Skip HR of you can, usually they don't know anything about payroll and don't care.

Source: I am a payroll admin.

+1.  Source: retired HR

Good to know, I kind of assumed HR would connect with Payroll. I’ll probably need to track down who bc we have HR and Payroll are still integrating.

The result doesn’t matter too much to me.  I just can’t believe more people don’t ask questions. It’s more about preparing myself. It’s big enough that it will impact my withholdings and my 401k contribution significantly. But there’s also a possibility they may pay half this year and half next. The answer changes depending on the person. Which honestly I think all this HR, benefits, payroll part must be much more complicated. For example, I’ve already received 2 sums. And there are at least 2 more coming but possibly broken into 4 lol.  And with everything being in flux, I feel like the potential for a mistake is higher.

[Gremlin]

You should definitely keep asking questions and make sure you double check that the answers given match up with the payments made.

There's plenty of room for human error in processing these sorts of "one-offs".  I've had this happen to me in the past.  Not intentional (and addressed immediately I pointed it out), but any complexity increases the chances of mistakes being made.

[Scortius]

It was my understanding that bonuses are always taxed as regular income. Because of their unpredictable nature they are usually withheld at higher rates, but that all gets balanced out with your tax bill or refund.

[onlykelsey]

It was my understanding that bonuses are always taxed as regular income. Because of their unpredictable nature they are usually withheld at higher rates, but that all gets balanced out with your tax bill or refund.

Yeah, there's no special "bonus" tax rate.  Maybe it's withheld on differently.

[sherr]

It was my understanding that bonuses are always taxed as regular income. Because of their unpredictable nature they are usually withheld at higher rates, but that all gets balanced out with your tax bill or refund.

Yeah, there's no special "bonus" tax rate.  Maybe it's withheld on differently.

Bonuses are withheld at your full marginal rate because the withholding rate for your base salary has already been estimated and set to account for the lower brackets and average deductions. So no there is no special "bonus tax", but yes bonuses are withheld at a higher rate than your regular paycheck and yes it all balances out at tax time.

[ETBen]

It was my understanding that bonuses are always taxed as regular income. Because of their unpredictable nature they are usually withheld at higher rates, but that all gets balanced out with your tax bill or refund.

Yeah, there's no special "bonus" tax rate.  Maybe it's withheld on differently.

Bonuses are withheld at your full marginal rate because the withholding rate for your base salary has already been estimated and set to account for the lower brackets and average deductions. So no there is no special "bonus tax", but yes bonuses are withheld at a higher rate than your regular paycheck and yes it all balances out at tax time.

Oh yeah that’s what I meant but didn’t know how to word it. But some of these have been listed as a bonus on my paycheck and others not. Some had 401k contributions taken, others not. Just recently though. prior to this it was all as expected.