Deferred compensation is an addition to an employee's regular compensation that is set aside to be paid at a later date. In most cases, taxes on this income are deferred until it is paid out. There are many forms of deferred compensation, including retirement plans, pension plans, and stock-option plans¹.

Deferred compensation can be offered as a way for employers to retain key employees or as a way for employees to save for retirement. The employee can choose how much of their salary they want to defer and how they want the money invested¹.

(1) What Is Deferred Compensation? - Investopedia. https://www.investopedia.com/terms/d/deferred-compensation.asp.

(2) DCP - Deferred Compensation Program - Plan Guide. https://www.drs.wa.gov/plan/dcp/.

(3) Plan Highlights - Pennsylvania State Employees' Retirement System. http://sers.pa.gov/DeferredCompensationPlan.html.

(4) New York State Deferred Compensation. https://www.nysdcp.com/rsc-web-preauth/.

(5) dcphome - NYC.gov. https://www.nyc.gov/site/olr/deferred/dcphome.page.