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

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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.

An Advantage of Indirect Pay Is That Benefits Receive More