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Asked by Timyia Thomas on Jun 14, 2024

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An advantage of indirect pay is that benefits receive more favourable income tax treatment than direct pay.

Indirect Pay

Compensation that includes benefits not given directly as cash, such as health insurance, retirement plans, and paid time off.

Income Tax Treatment

Refers to the way tax laws are applied to an individual's or entity's income, including deductions, exemptions, and the calculation of taxes owed.

Direct Pay

The monetary compensation received by employees for their work, including wages, salaries, bonuses, and commissions.

  • Know the advantages and disadvantages of direct and indirect pay components.
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Caroline ClesiJun 21, 2024
Final Answer :
True
Explanation :
Indirect pay, such as benefits, may have more favourable income tax treatment than direct pay. For example, certain benefits may be considered nontaxable income or may be eligible for tax credits or deductions. This can allow employees to save money on their taxes and increase the value of their overall compensation package.

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