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Remuneration Planning

What is Remuneration Planning?

Remuneration is the total employment package received by an employee.

It includes not only base salary but any bonuses, commission payments, overtime pay, or other financial benefits that an employee receives from their employer. It also includes non-financial benefits such as company cars and private medical insurance.

Why do I need to consider remuneration planning?

Some of the main benefits of remuneration planning include: 

  • Development of a tax-efficient strategy to extract profit from your business.
  • Providing competitive and tax efficient employee remuneration packages to enable you to attract the best talent on the market.
  • Mitigating tax liabilities for business owners resulting in more cash in your pocket.

Less tax exposure for business owners also means that more cash can be left in the business to be applied in everyday operations and for investment purposes.

There are a lot of factors to be aware of and to consider when formulating a successful extraction plan, so experienced attention is essential.

What Exchange Accountants can do for you:

Remuneration planning requires a collaborative approach from you and your accountant. It can be undertaken at any time, but we recommend prior to the start of a new tax year as this enables you to obtain maximum personal tax benefit from the get-go.

To kick start the process we like to start with an initial meeting to establish the level of income you require from the company in order to support your lifestyle and day-to-day living costs. At this meeting we would also aim to gather other information such as details of existing staff & directors’ packages, any planned large personal expenditure and any retirement / pension provisions.

We will then seek to design a few different tax-efficient remuneration strategies for you to consider, prior to agreeing on a final option for the company to move forward with for the tax year ahead.