PTO

PTO sharing is a generous perk, but could present tax concerns next year

Published Updated 2 Min Read

Not everyone can afford to donate money to help their struggling coworkers and favorite charities; but with PTO sharing benefits, employees can donate their vacation time.

“These programs are great for employee morale because employers that have these programs demonstrate great community stewardship,” says Tiffani Greene, employee benefits attorney at Fisher Phillips, a nation-wide employment law firm. “It’s natural that people want to donate to charity, or help out one of their peers, but it’s not always possible for them to donate out of pocket. It’s often easier to donate vacation because it’s employer-sponsored.”

With a charitable giving program, the employee forgoes vacation and the employer and employee work together to select an organization to receive the funds they would’ve gotten had they taken PTO.

RESTRICTIONS: Employees receive donated PTO at their own salary rate, not that of the donor’s. The general rule is if you donate leave, you’re still taxed on W2 wages and employment taxes, unless you have a leave donation program. When done correctly, the donor isn’t taxed on what they donate at all.

Kayla Webster
Freelance writer

Kayla Webster is a freelance writer based in New York City.


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