Taking vacation pays dividends. Especially if your company allows you to put unused vacation or sick leave days into your 401(k) or profit-sharing plan.

In order to encourage savings, the Obama administration recently blessed such transfers. While companies may have to amend their benefit plans to allow it, the administration hopes firms will do so. "We tried to build in as much flexibility as possible to make it attractive," says Mark Iwry, a senior Treasury official.

The techniques are available for use with all qualified plans, which include 401(k), Keogh and profit-sharing plans but not IRAs or SEP-IRAs. While the rules don't currently extend to the 403(b) plans used by non-profit organizations, Treasury is willing to consider expanding them to include such plans, says Mr. Iwry.

The rules apply to "cash-outs" of unused vacation, sick leave, or personal days that occur either annually or when an employee leaves a job. If an employer pays for such leave either in whole or in part, the worker could contribute the entire payment to the company's plan — unless he or she has already maxed out the annual contribution limit. This year the limit for most workers is $16,500, or $22,000 for those over 50.

Employers who don't currently pay workers for unused leave may want to reconsider their policies. The transfers compensate workers and encourage savings but do not increase base pay.

Companies can opt to pay workers for unused leave only if they bank the money in a 401(k) or other qualified plan — in effect requiring employees to save or else forgo the money. A firm may also let employees decide whether to save or spend.

While firms that choose to pay for unused leave must offer it as an option to all plan participants, they do not have to offer it every year. They can also prorate or limit the amount of leave they are willing pay for.

Will payments for unused leave get an employer match? Unclear. The answer depends in part on how a firm's plan is written, says Cara Welch of World at Work, an association of human resource professionals. What is clear is that the plan must remain non-discriminatory, meaning that a company cannot give the match to some workers and not others.