This is something that a lot of people don't understand. I am hiring now non union, and just my sick, vacation, holiday and 401k matching adds $10-12 per hour to rates.I was told 11 gets vacation taken off the top of the taxable rate and will drag the take home down to lower than non union shops.
I’m fine with paying/allocation. Maybe a better way to ask is, is the vacation percent of the benefits paid along with benefits (untaxed) or with my taxable rate(after benefits)Its a case of 'pay you now or pay you later'.
When your vacation/stats are paid out as a % on every cheque, you go unpaid for the stats and 2 weeks vacation you're off work. Once you do your taxes, should get a refund.
f you don't take your vacation time, then yes - you are getting taxed appropriately for the extra % you earned all year.
Thanks, that does clarify a bit.As far as I know the pensions, annuity, and the health care, are all un-taxed as far as income. I’m sure there’s plenty of tax on some of them though. Like some of the money towards healthcare goes to the affordable health care act. Some of the pension money goes to guaranteeing the plan with a federal insurance plan. Some of your annuity money will go to managing the plan etc…Because the money is un-taxed as far as income, there are caps as to how much you can contribute for retirement.
To hopefully answer you question though, the vacation fund comes out after taxes, because it’s income, whether you spend it or not. The amount is based on the gross income if they are using percentages. In other words our plans are based on percentages. This way you don’t have to vote where the money goes for each raise. There are times it will have to go to a vote. Let’s say to keep the health care or pension afloat. Then they will raise or reallocate the percentages. I’m not sure if every local is like that?
Our vacation fund is also by percentages, and we have a suplimental fund that is un-taxed. The supplemental fund is different than vacation. It’s more of a blend of a health savings account, and a Flexible spending account. HSA’s and FSA’s have different rules. You get a debit card and you can use it on anything health related. Everything from tampons to copays, to whatever the health plan doesn’t cover. . Black market kidneys might be hard hide? The money rolls over every year like an HSA, but we don’t have high deductibles or high co-pays that are required for an HSA. You also use it to pay for your health care coverage if you want to retire early, or if you didn’t hit the hours worked need to keep you in the plan. Many guys complain that there’s too much money in their account and they can’t get to it. But none the less, they just voted to raise the percentage. I’m not looking forward to the day I have to wipe that fund out!