Paper Topic:

Current compensation

Running Head : Current Compensation

Current Compensation (Name (Institution (Name of Instructor (Subject

Current Compensation

Current compensation is the wages , salaries , bonuses , and other forms of remuneration that are paid or are directly provided to employees in the year in which they perform services for the employees (Lassila Kilpatrick , 2003 . According to Lassila Kilpatrick (2003 , it si typically the largest segment of the to rank-and- employees and executives alike . Current compensation is the largest segment because most employees rely on it to satisfy their current consumption expenditure requirements

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, unreasonable (excessive ) compensation is a form of self-dealing that can lead to penalty taxes - these legal issues may have to be tempered by outside appearances : a form of compensation may in fact be reasonable ' and perfectly legal ' and still draw public criticism as being excessive (Hopkins , 2004

It is specified that compensation in general , is includible in the gross income of the recipient . Taxable wages for income tax withholding purposes includes all remuneration for services performed by an employee for his employer including the cash value of benefits paid in any medium other than cash (qtd . in Lassila Kilpatrick , 2003 Therefore , wages , bonuses , salaries , commissions on sales or insurance premiums , certain fringe benefits , and pre-retirement leave benefits are taxable and subject to payroll taxes

In general , the term wages ' is defined as current compensation paid to employees on the basis of a certain rate per hour it is typically paid to rank-and- employees (Lassila Kilpatrick , 2003 . Salaries represents the amount paid over a period of time , sometimes regardless of the actual amount of time spent by the employee , which are typically paid to executives and professional and managerial employees however whether compensation is called wages or salary , it is subject to tax withholding

According to Lassila Kilpatrick (2003 , in some cases employees who work more than the normal hours during a particular day or other pay period will receive remuneration at a higher than normal rate overtime pay is treated the same as any other wages and salaries that is , it is taxable when received

Bonuses are payments made to employees in addition to their regular salary as a reward for services performed (Lassila Kilpatrick , 2003 They are generally based on such factors as profitability , length of time , productivity and others . Whatever the cases , bonuses , as additional compensation , are includible in gross income of the employee and are also subject to income tax withholding (Lassila Kilpatrick 2003

Employees frequently provide some of their employees with vacation time and , in some cases , pay them some compensation for that such vacation pay directly received by the employee is taxable like other salaries and wages , whether the employee takes the vacation odr work s during the vacation period (Lassila Kilpatrick , 2003 . Vacation allowances that are paid to an employee from a vacation fund are taxable to the employee as compensation to the extent that they are based on services rendered

According to Hopkins (2004 , in many respects , commissions are subject to the same...

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