What are the tax implications of taking vacation payout versus having the hours roll into a health care savings plan?

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What are the tax implications of taking vacation payout versus having the hours roll into a health care savings plan?

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Vacation payouts are taxed at the lump sum rate, which is currently 28 percent for federal withholding, 7.65 percent for Social Security and Medicare withholding, and 6.5 percent for Minnesota withholding. That means the net amount you will receive on a $10,000 vacation payout is $5,785. Some of the federal and state taxes withheld may be returned through an income tax refund.

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