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Life Planning Account (LPA)
Like the more familiar employer-sponsored accounts, LPAs are a means for companies to help employees support the health and wellness activities in their lives.
LPAs are funded by employers with money that is taxable as income to employees when they spend it, unlike the tax advantages of HSAs, FSAs and HRAs.
Employers decide how employees can spend their LPA funds, with acceptable product and service categories. Many employers see this ability to limit and direct employee spending of employer-provided money as a compelling reason to offer LPAs.
Benefits of Using PTO Exchange for LPAs:
Flexible benefit that supports wellbeing
Debit card options for additional flexibility
Easy integration with PTO conversion service plans
Quick implementation that supports a variety of data layouts
Optional pricing plans
Differentiated benefit that helps attract and retain talent
Tax Treatment and Payroll
Because the value of your LPA reimbursement is considered compensation by the IRS, the company must remit employer payroll taxes and withhold employee payroll taxes from it. The gross amount will be included as compensation on your W-2.
Relating to payroll, the reimbursement is considered additional earnings. There is no associated deduction so, after taxes have been taken, what’s left is added to net pay.
Payroll Integration
The PTO Exchange platform integrates seamlessly with leading payroll providers including Kronos, Ultimate, Paylocity, ADP, Workday, and SAP, among others.
Payroll integration refreshes your employee data each pay period, ensures that PTO earnings and deductions are taxed appropriately and PTO balances are adjusted properly. Smaller customers can use the built-in PTO Exchange Data Import/Export tool to manage their payroll interactions. Larger customers can set up automated file interfaces that run outside of normal business hours and ensure their data is always up-to-date and accurate.
Unused vacation doesn’t have to go to waste. With PTO Exchange, you can turn unused PTO into a strategic benefit—helping employees support their families, reduce debt, save for retirement, or simply gain peace of mind.
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