Employees typically can't donate their time directly by reducing the
amount of vacation owed to them. The concept is similar to someone
donating their time such as a consultant, in which case they normally have
to be paid a fee for their services and then donate the money back to the
organization.
Someone giving vacation time will have to take something into income.
You'll have to pay them an additional amount and reduce their vacation
accordingly. This will typically increase their overall tax liability
since the credit for the donation will be less than the increase in taxes
caused by taking the gross amount into income.
Seek advice from your legal counsel on these schemes as they vary by tax
jurisdiction.
You should also consider the employee productivity aspects of donating
vacation time. Vacations are part of the benefits given to employees in
order to benefit their health and welfare. If someone is not taking their
vacation you should determine why, and if necessary have a conversation
with them or their supervisor in order to help get the amount of banked
vacation down to a reasonable level. |
