Small Business Glossary and Definitions

Supplemental Unemployment Benefits (SUB) is a savings plan or trust created to pay employees severance pay or temporary pay when a worker is laid off or let go. SUB plans are used mostly when an employer is trying to cut back on expenses that leads to reductions in the work force. During times like these, it can be difficult to find money to pay severance to employees. A SUB is a fund that lowers payroll tax obligations, which can help the company save money while still being able to provide for their employees.