Once severed from WF, unused, accrued PTO is paid in lump sum. So that means it's potentially taxed at much higher rate, especially since it will be lumped in w/a biweekly pay period's wages?
That stinks. I have 8 wks of unused PTO and, after taxes, it will be closer to 4 wks.
I never really understood why somebody would roll over that much PTO. It's a benefit and opportunity to take time away. I could see a week or two at most but even then, get out of the office. You never know what life will throw at you.
So many focusing on their own misunderstanding of how some states treat PTO and only a few with the intelligence to understand how money (taxes) is fungible which was the core ask.
The fact that OP has to ask this Q shows how poorly educated we are a whole in Finances in this country.
@inl clearly not capable of reading thread. Too bad, so sad you aren't lucky enough to live in a state that counts PTO as wages, so you can rollover LOTS of vacation time. Go cry about it.
I was paid out my PTO a month ago after I was laid off, it was a separate check then my severance check and it was taxed higher as a supplemental income.
8 weeks of PTO?! Lies, LOL! When I got axed last year and got about 2 weeks of PTO in a lump sum check at the end of my 60-day notice, it wasn't taxed any harder than a usual paycheck.
Laughing at poor sâps in states that don't count PTO as wages. The fact that many are defiant in their misinformation is even funnier.
those of us in CA get to accrue up to a certain amount, something 1.5 your yearly allotment at which point you justh stop accruing until you take PTO. I carry over 2 to 3 weeks worth every year and if I left tomorrow would have more than 8 weeks. now, while you can go negative on the accrual side, anyone who uses more than they have accrued and then leaves the bank has to pay it back.
PTO is earned as you work through the year. You would get paid out only what you've earned, not the year-end potential PTO.
Boo Hoo and LMAO
It will not be treated the same as bonus on paystub. In states where PTO is considered wages, it will be in same bucket as regular paycheck.
People should read the Employee Handbook before respj ding so abruptly. I have over 3 mos. of PTO (and counting) that will be paid out if I'm laid off.
There are states (e.g., NE, CA) that count PTO as wages (so not allowed to lose PTO), so you can carry over PTO up to your accrual cap. I know some people with 12+ weeks unused, accrued PTO.
Get educated.
Read Employee Handbook.
if you are in a PTO accrual state you can accrue up to one and a half times your annual allotment. if you been with the bank a while and arenat 30 days then you can arcrue up to 75 days so easy to have 8 weeks or more. additionally there may be grandfathered policies people fall under from other companies wells has acquired over the years.
as for taxes, whether they take more or less than your current tax rate you will get whole come tax time. I have the problem where I don't get enough taxes taken out so when my tax rate is >30% and they only take ourlt 22%, I pay the difference come April 15
It will not be taxed at a higher rate, same as bonuses. It will be withheld at a higher rate and you will get back any overpayment the next time you file your taxes.
How does one accrue 320 hrs of PTO through Feb?
OP and his nothingburger
Per IRS Publication 15, it will be taxed as "supplemental income" (like a bonus) and, yes, withheld at a higher rate. That is separate from wages (look at your last paycheck with a bonus to see they are different line items).
In theory it is withheld at a higher rate, but your overall tax rate is not changed, so your have a higher chance of getting money back.
In practice, that isn't usually the case after the crackdown on itemized deductions and changes to withholding. Effectively you are right in saying "taxed at a higher rate", but just wanted to explain how the IRS justifies this to be (hopefully) helpful.
You don’t accrue 8 weeks of PTO until the end of the year. The most you could have accrued is 5 carryover days that disappear March 15 and whatever portion of portion of 8 weeks you’ve accrued this year, which will be around 7 days so far.
You don't have 8 weeks of PTO.