Taxing unused non statutory annual leave sold back to company

T

The Grinder

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My company allows employees to buy or sell holidays. If one sells holidays then that income from the sold days is subject to tax.
Should this be the case or should they be free from tax?
 
Re: Taxing sold holidays

The Grinder said:
My company allows employees to buy or sell holidays. If one sells holidays then that income from the sold days is subject to tax.
Should this be the case or should they be free from tax?
Click to expand...

For starters, i thought it would be illegal to get yourself into a position where you had less than the statuory minimum number of holidays a year. For certain it is illegal to be paid instead of taking at least the minimum of hols, which for most bog standard full time people is 4 weeks?
 
Re: Taxing sold holidays

In this case is the buyer of unused holidays the employer or fellow employees?
 
Re: Taxing sold holidays

Hi Grinder,

Are you and your company based in Ireland?

As legend said it is illegal in the Republic of Ireland for a company to pay employees for 'un taken' statutory annual leave (4 working weeks per year = 20 days).

In a situtation where an employee is leaving and has some 'un taken' annual leave it is allowed for the employer to pay 'Cessar Pay' for the untaken annual leave. This pay is taxed in full in the normal way.

If a company buys back non statutory annual leave from employees it must do so through payroll and charge the tax in full.

ajapale
 
Re: Taxing sold holidays

Hi,

I think you have answered my question. I'm allowed 30 holidays per annum. I sold 10 and am taxed on this. They divide my gross pay by 260 and multiple the result by 10. This is split in 12 monthly payments but it's taxed. I'm based in Ireland but the co. is based in the UK.

Thanks
 
Re: Taxing sold holidays

Thanks Grinder,

I propose moving this back to "Careers and Jobs" (from Taxation) since this is where all the other questions relating to annual leave is kept.

aj
 
I have changed the heading of this interesting thread and I will be including it in the key posts section at the top of the forum.

Grinder,

If you were to 'buy' a days annual leave from your employer I assume that this is handled in the same way as 'absence without leave', ie your gross salary would be reduced by 1/260th of a day?

ajapale
 
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