Assuming this severance pay was not due to retrenchment, it would be added to your salary and taxed at your marginal rate of tax per the normal tax tables for individuals. Your employer could request a tax directive from SARS as the award will push you into a higher tax bracket and you may end up overpaying tax for the year due to the award. However, if this is the case and you don't have a directive, then you can always claim the overpaid tax back when you submit your tax return.
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