admin.team@sizemoretucker.com Lexington: (859) 514-3300 Lebanon: (270) 692-9005 Employer on the Go Employee Self Service My Employer on the Go Client Portal
SizemoreTucker PLLC & Sizemore Strategic Solutions
  • HOME
  • ABOUT
  • SERVICES
    • Tax Compliance and Planning
    • Payroll Services
    • Client Accounting Services
  • CLIENT CENTER
    • Employer on the Go
    • Employee Self Service
    • My Employer on the Go
    • Client Portal
    • Pay My Bill
  • BLOG
  • CONTACT US
December 14, 2016

By: Tedbytre57

Help prevent the year-end vacation-time scramble with a PTO contribution arrangement

Many businesses find themselves short-staffed from Thanksgiving through December 31 as employees take time off to spend with family and friends. But if you limit how many vacation days employees can roll over to the new year, you might find your workplace a ghost town as workers scramble to use, rather than lose, their time off. A paid time off (PTO) contribution arrangement may be the solution.

How it works

A PTO contribution program allows employees with unused vacation hours to elect to convert them to retirement plan contributions. If the plan has a 401(k) feature, it can treat these amounts as a pretax benefit, similar to normal employee deferrals. Alternatively, the plan can treat the amounts as employer profit sharing, converting excess PTO amounts to employer contributions.

A PTO contribution arrangement can be a better option than increasing the number of days employees can roll over. Why? Larger rollover limits can result in employees building up large balances that create a significant liability on your books.

Getting started

To offer a PTO contribution arrangement, simply amend your plan. However, you must still follow the plan document’s eligibility, vesting, rollover, distribution and loan terms. Additional rules apply.

To learn more about PTO contribution arrangements, including their tax implications, please contact us.

Previous Post
Next Post

Recent Posts

IRS extends relief for physical presence signature requirement

September 26, 2022

Provide employee parking? Here’s what the IRS wants to know

September 14, 2022

Want to see into the future? Delve deeper into forecasting

September 12, 2022
SizemoreTucker PLLC & Sizemore Strategic Solutions © 2024 All Rights Reserved.
Privacy Policy

Search