Question

Role of tax planning in compensation benefits

Answer 1

Proper tax planning can be quite effective for both the employer and employee. However, it must be noted that there are different types of compensation. All these types cannot be measured alike. Both compensation and tax planning are closely related and one cannot be done without considering the other.

When analyzing how tax affects compensation planning, it must be noted that the consequences of tax to both the employee and the employer must be considered. This is because tax can affect the overall compensation paid to all the employees.