Ask HN: Is overtime taxable as a gift, taxable benefit, or barter transaction?

1 point·_DeadFred_··6 comments

It seems to me that people working overtime are gifting businesses quite a lot of free benefits. Shouldn't this fall under gift tax, a taxable benefit, or barter transaction (businesses flat out stating it is their justification for future promotion/salary increases)?

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Any meaningful answer to this question is going to require the specific jurisdiction.

There probably is a jurisdiction, somewhere, where this is a plausible theory.

But, with the disclaimer that IANAL in any jurisdiction, I'll recommend against proposing such ideas in your workplace.

Just to be clear, you are talking about unpaid overtime, right?

Correct. If I make 200k a year, and put in and extra 20 hours a week I'm giving the company 100k a year with the implied barter that it will pay off during my future career at the company (so an obvious barter transaction). It seems like the company should be taxed on that labor. Especially if it then gets added as a real value to the company's bottom line by being recognized/added to the capitalized value of say software the company develops.

I can't receive any such free labor without being taxed. I can't receive free equity into my home worth 100k without being taxed.

Edit: Or maybe it's been so long since I worked at a publicly traded software company I don't understand how software dev hours are capitalized anymore.

Playing devils advocate for a sec. Would your employer not simply counter that they pay for the work produced not for the time required to produce it? Essentially saying that you are giving yourself a pay cut.

By that argument, any wasted time should be deductible as an expense.

Accounting for time gets difficult.

Capitalism and the IRD mostly measure money because otherwise there's too much leeway for fraud.

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