Salary Reduction Contribution

Posted in Finance, Accounting and Economics Terms, Total Reads: 1906

Definition: Salary Reduction Contribution

Salary Reduction Contribution is a contribution (from the salary) done directly by an employer to a specific selected plan. The employee would not get the contributed portion in his salary. 

Net Salary (in cash or cheque)=Total Salary-Salary Reduction Component.

Total salary anyways is not reduced and remains same but the reduction component is not available as disposable income, it rather becomes part of a specific plan.

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