Small Business Encyclopedia

Category: Employee-benefits

Cafeteria Plan

An employee benefit arrangement allowed by IRS Code Section 125, under which employees are allowed to pay for certain employee benefits on a pre-tax rather than an after-tax basis.

Compensation

In financial terms, the salary and wages you pay to your employees for the work they do. Other, nonfinancial forms of compensation can also be offered to attract and retain staff.

Benefits

A product or service's customer-oriented strengths; statements of a valuable product or service feature, with an emphasis on what the customer gets from the products

Bonus

A monetary payment made to an employee over and above their standard salary or compensation package

Employee Stock Ownership Plans (ESOPs)

A trust set up by a company to allot some of its stock to its employees over time. Used as an employee incentive, the plan often provides tax benefits to the company.

KEOGH Plans

A pension plan that lets business owners contribute a certain portion of their profits or a predetermined annual contribution to a tax-sheltered account, where the funds grow until retirement

Retirement Plans

An arrangement to provide people with an income during retirement when they're no longer earning a steady income from employment

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