What Is Deferred Compensation? | HR Glossary | BambooHR
Earnings set aside to be paid at a later date, such as retirement or the end of a vesting period.
Deferred compensation is pay that an employee earns now but receives later — for example, retirement contributions, long-term incentive plans or share awards that vest over time.
It is used to reward loyalty, align employees with long-term success and, in some cases, offer tax advantages.
The specific rules and tax treatment vary by scheme and country, so both employer and employee should understand the terms and timing before relying on the benefit.
