Management Glossary

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tax equalization plan

A employment compensation plan that a company may put in place for employees who accept assignments outside of their home countries, states or provinces. A tax equalization plan recognizes that different jurisdictions impose different tax rates on individuals working within their boundaries. The plan adjusts the compensation of employees assigned away from their home jurisdiction such that their take-home pay s(i.e., pay after taxes) are equal to what they would be if the employees were working in their home jurisdiction.

Contributed by: Managerwise Staff

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