Contributing unused vacation to a retirement plan

✍ Scribed by Shirley Dennis-Escoffier

• Book ID: 102299132
• Publisher: John Wiley and Sons
• Year: 1997
• Tongue: English
• Weight: 230 KB
• Volume: 8
• Category: Article
• ISSN: 1044-8136
• DOI: 10.1002/jcaf.3970080312

✦ Synopsis

mployers usually deal with unused vacation time in one of three ways: (1) the vacation is forfeited if not used in the E calendar year; (2) the unused days are carried over to the next year; or (3) the employer pays the employee the equivalent of the unused days in cash. "he problem with forfeitures is that employees are usually reluctant to forfeit their vacation and may rush to take their vacation at the end of the year, substantially reducing the company's workforce. Permitting employees to carry the days over to the next year frequently just postpones dealing with the problem. Offering cash is expensive for employers, because they effectively pay double wages and double payroll taxes for each day the employees work rather than taking a vacation. Now, however, another option may be available as a result of an IRS ruling.