Employee Compensation Structuring

An important asset of any organisation is its human resource. Organisations today strive to ensure that the employees receive significant compensation in the form of salaries, allowances and benefits. However, fierce competition in the global marketplace is putting pressure on organisations to be cost conscious while remunerating employees in a tax-efficient as well as compliant manner.

The complexity arising out of continuously changing tax laws, and the rising emphasis by revenue authorities on scrutinising employee compensation, makes it essential for organisations to ensure that it is completely tax compliant.

Flexible and employee friendly
Cost effective
Simple to administer
Tax efficient
Aligned with industry practice

Key service offerings

We have considerable experience in identifying opportunities and leveraging them to assist clients in formulating tax efficient and compliant strategies. In particular, such compensation bifurcation exercises can be customised to the client’s requirements to include:

Analysis of the current employee compensation structure
- advise on the tax implications thereof
- suggest removal of policies which are not cost effective due to administrative costs or potential litigation costs
Examine other compensation bifurcation options available to the organisation
Assistance in preparation of sample compensation bifurcation and at each level incorporating the suggested components
Advise on the processes to be implemented for the verification of documents in respect of expense and compensation claims to ascertain their adequacy from a tax perspective
Design a standard manual containing payroll policies and procedures
Participate/ conduct employee communique session in rolling out revised compensation items
Identify potential tax, interest and penalty exposure (if any).