TD Bank will reimburse its employees for the additional federal and state taxes that they pay for benefits for same-sex partners beginning Jan. 1.

The unit of Toronto-Dominion Bank (TD) will make a one-time payment at the end of the year to employees who have enrolled their domestic partners in the bank's health benefits, the company said Wednesday. The payment will be equal to the extra taxes same-sex domestic partners pay for benefits over the course of the year.

"TD Bank is committed to building an inclusive, barrier-free workplace where every employee feels valued, respected and supported," Robert Pompey, head of commercial management administration at TD Bank and co-chair of the bank's Lesbian, Gay, Bisexual, Transgendered and Allies Committee, said in a news release. "Offsetting these extra taxes for our LGBT employees makes us more competitive in the hunt for great talent and it's the right thing to do."

Bank of America (BAC) announced a similar plan in October 2011 and began reimbursing its same-sex partners this year for the extra taxes they paid for health insurance.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.