If you limit how many vacation days employees can roll over to the new year, you might find your workplace a ghost town in December as employees scramble to use, rather than lose, their time off. A paid time off (PTO) contribution arrangement may be the solution. It allows employees to convert unused vacation hours to retirement plan contributions. If the plan is a 401(k), it can treat these amounts as a pretax benefit or as employer profit sharing. Contact us to learn more about PTO contribution arrangements, including their tax implications.
