deferred compensation


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Deferred compensation

An amount that has been earned but is not actually paid until a later date, typically through a payment plan, pension, or stock option plan.

Deferred Compensation

Money or other compensation that has been earned but not yet received by the earner. Deferred compensation is not taxed until it is actually received, and is usually taxed at a lower rate when it is received (depending on one's income later in life). The most common form of deferred compensation is a retirement plan such as an IRA or 401(k), but stock options and other pensions also qualify.

deferred compensation

Compensation that is being earned but not received, a process that defers the taxes on the compensation until it is actually received at a later date. Deferred compensation includes various plans, some being pensions, profit-sharing, and stock options.

deferred compensation

payment schemes that pay lower wages during the early years of employment in an organization and higher wages in subsequent years. With deferred compensation schemes, a worker's remuneration increases with seniority and experience, which tend to improve the worker's efficiency within the organization. Such compensation schemes tend to reduce labour turnover and reduce SHIRKING. See PAY.

Deferred Compensation

Compensation that will be taxed when received or upon the removal of certain restrictions on receipt and not when earned. For example, contributions by an employer to a qualified pension or profit-sharing plan on behalf of an employee are considered deferred compensation. Such contributions will not be taxed to the employee until the funds are made available or distributed to the employee, usually upon retirement or separation from service.
References in periodicals archive ?
One way to bridge this gap is by offering a nonqualified deferred compensation plan, which allows compensation earned in one year to be set aside and paid in a later year.
NYSE: VOYA) its retirement business has been chosen by the Public Employees' Deferred Compensation program in Nevada as the single service provider for the state's retirement program.
Amid the tangle of revelations and accusations relating to Liane Richardson's firing as Lane County administrator, one detail should not be overlooked: The county has a deferred compensation committee that operates with little or no oversight.
Are contributions to, and postretirement payments from, a deferred compensation account balance or nonaccount balance plan subject to FICA and FUTA taxes?
Many tax-exempt organizations and state and local governments (collectively referred to as covered organizations) find it necessary or desirable to maintain deferred compensation arrangements for their executives.
Deferred compensation is a highly popular and valuable concept for some business executives--but not for all.
In allowing selected management or highly compensated employees to defer income until after retirement, deferred compensation offers multiple tax advantages to both the employer and the participant.
One for an employer seeking ways to benefit only selected key employees may be the adoption of a non-qualified deferred compensation plan.
Hidden in the October 2008 bail-out bill was a new draconian rule that applies to traditional deferred compensation arrangements of partnerships and foreign corporations, and some performance and management fee arrangements of private equity and hedge funds.
Section 409A regulates the taxability of executives' non-qualified deferred compensation plans.
Non-Qualified Deferred Compensation Regulations: The Internal Revenue Service (IRS) recently issued final regulations under Section 409A dealing with nonqualified deferred compensation arrangements.