I would check with an accountant before I implemented this policy. I imagine FullContact treats these $7500 payments as supplemental wages. However, I would not

I would check with an accountant before I implemented this policy. I imagine FullContact treats these $7500 payments as supplemental wages. However, I would not want to explain to an auditor how this is a legitimate business expense. From the IRS: "You can generally deduct a bonus paid to an employee if you intended the bonus as additional pay for services, not as a gift, and the services were performed. However, the total bonuses, salaries, and other pay must be reasonable for the services performed." You could try to shoehorn this as vacation pay, but an auditor would question why workers are getting effectively a significant bonus for time not worked. Any employee who elects not to take a vacation would have a pretty good case to demand the vacation pay anyhow, since he performed more services than other bonus-receiving workers.