Taxable Heads of Income

Deferred Compensation is an opportunity to voluntarily shelter a portion of your wages from income taxes while saving for retirement to supplement your social security and pension benefits. Under the Plan, income tax is not due on deferred amounts or accumulated earnings until you receive a distribution (payment) from your account. Presumably, distribution is at retirement when your tax rate is expected to be lower.

OR

Deferred compensation is income to be paid at a later date, usually the end of employment.

OR

Compensation earned by an individual, the receipt of which is postponed until a later date, usually upon termination of employment or retirement. Typically, the deferred amounts are invested on the recipient's behalf and may be supplemented by contributions by the company. If the compensation arrangement meets certain requirements, an individual may not pay income taxes on the compensation until he or she receives a distribution of some or all of the deferred amounts.