The bonus checks that will go to members of state government’s largest union if they adopt a new contract will put a nice bump in their paychecks and make a $260 million dent in the state budget.
But how much will a member of SEIU Local 1000 actually take home?
Bonuses are considered supplemental income and are subject to a higher tax withholding rate from the IRS.
It works out to 25 percent from the federal government and another 10.23 percent from state government, according to the state Department of Finance.
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That 35.23 percent withholding rate will take up $880.75 from an SEIU bonus check, leaving workers with $1,619.25.
The good news according to the Finance Department is that “the higher withholding rate should result, in most cases, in additional refunds when the tax return for that year is filed, or for a reduction in taxes owed when the return is filed.”
That’s because the employee’s total income for the year would be taxed at the same rate, leading some of the higher taxes paid up front to come back to the worker.
SEIU represents some 96,000 workers across a broad range of careers that includes custodians, government analysts, tax auditors and nurses. Union leaders say the $2,500 bonus is the equivalent or better than 4 percent raise for two-thirds of its members.
SEIU members are voting on a 42-month contract that would raise their pay by 11.5 percent. Their current contract expired on July 1, 2016.