Common use of Definition of Compensation Clause in Contracts

Definition of Compensation. Compensation includes your wages, salary, commissions, bonuses, and tips, but does not include income from interest, dividends, or other earnings, or profits from property, or amounts not included in your taxable income. It also includes your earned income if you are self- employed (reduced by deductible Xxxxx plan contributions and one-half of your self-employment taxes) and taxable alimony. The IRS treats as compensation any amount properly shown on your Form W-2 as “wages, tips, and other compensation” reduced by the amount shown on that form as distributions from nonqualified plans. In addition, nontaxable combat pay is also considered compensation eligible for Xxxx XXX contributions, effective retroactively, beginning with tax year 2004.

Definition of Compensation. Compensation includes your wages, salary, commissions, bonuses, and tips, but does not include income from interest, dividends, or other earnings, or profits from property, or amounts not included in your taxable income. It also includes your earned income if you are self- self-employed (reduced by deductible Xxxxx plan contributions and one-half of your self-employment taxes) and taxable alimony. The IRS treats as compensation any amount properly shown on your Form W-2 as “wages, tips, and other compensation” reduced by the amount shown on that form as distributions from nonqualified plans. In addition, nontaxable combat pay is also considered compensation eligible for Xxxx XXX contributions, effective retroactively, beginning with tax year 2004.