Question

1. When would it benefit an employee to defer the receipt of remuneration to the following year?

a. When the employee's tax rate would be decreasing next year.

b. When there is an agreement with the employer to defer the receipt of remuneration.

c. When the employee's taxable income would be increasing next year.

d. When the employee's tax rate would be increasing next year.

2. Which of the following items is not relevant in determining the true value of indirect compensation to an employee?

a. The benefit is made available to all employees no matter what their position in the company.

b. The employee would acquire the benefit from a third party if it was not provided by the employer.

c. The employee needs the benefit.

d. The employer can acquire the benefit at a lower cost than the employee could acquire it for himself.

Answer 1

Answer to Question 1.

a) Deferring Receipt of remuneration when tax rate would be decreasing in next year is benefit to the Employee. Since he is paying tax at lesser rate. Answer "a" is correct

b) Agreement with the employer to defer the compensaion. Whether it is beneficial or not can not be ascertained in the present situation. Not known

c) When employee taxable income is more, he would end up with paying more tax depending on slab rates. Not Beneficial

d) Deferring receipt of remeneration, when employee tax rates are increasing is not beneficial to the employee

Answer to Question 2

b) The employee would aquire the benefit from a third party if it was not provided by the employer is not relevant in determining true value of indirect compensation to and emploee. Answer "b" is correct