Deferred compensation

From Wikipedia, the free encyclopedia

Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which that income is actually earned. Examples of deferred compensation include pensions, retirement plans, and stock options. The primary benefit of most deferred compensation is the deferral of tax to the date(s) at which the employee actually receives the income.

[edit] USA

In the US, Section 409A now imposes fairly detailed requirements on the timing of deferral elections and of distributions with the cudgel of imposing additional tax on the taxpayer prior to actual receipt of the deferred income if these requirements are not complied with.

Reference: Dictionary.com