Executive Compensation

Executive Compensation

Wages subject to federal employment taxes generally include all pay that you give to an employee for services performed.  The pay may be in cash or in other forms.  It includes salaries, vacation allowances, bonuses, commissions, and fringe benefits.  It does not matter how you measure or make the payments.

Taxable employee payments not normally provided to all, or the majority of, active employees are grouped as "executive compensation".  Generally, these payments are specifically negotiated and indicated in formal employment contracts or memoranda of employment.  Amounts an employer pays as a bonus for signing or ratifying a contract in connection with the establishment of an employer-employee relationship and an amount paid to an employee for cancellation of an employment contract and relinquishment of contract rights are wages subject to social security, Medicare, and federal unemployment taxes and income tax withholding.  Other taxable items include:

• Employer-Paid Memberships In Country Clubs Or Other Social Clubs

• Season Tickets To Entertainment Or Sporting Events

• Spousal/Dependent Travel Expenses

• Commuting Expenses/Parking

• Automobile - Use Of Car

• Financial Services

• Retirement Planning

• Additional Insurance

• Retirement Annuities