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Employee Compensation Structuring

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 manner.

The ambiguity arising out of continuously changing tax provisions, 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 practices

Key service offerings: 

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

  • Analysis of the current employee compensation structure so as to: 
    • advise on the tax implications thereof  
    • weed out policies which are not cost effective due to administrative costs or potential litigation costs
  • Examine other compensation structuring options available to the organisation
  • Assistance in preparation of sample compensation structures 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
  • Identify potential tax, interest and penalty exposure (if any).


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