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Differenz/Nachzahlungen verrechnen

English translation: Yes

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16:30 Mar 13, 2002
German to English translations [PRO]
Bus/Financial
German term or phrase: Differenz/Nachzahlungen verrechnen
context: employment contract with projected annual target salary;in this case the employee is paid a projected annual target salary that is made up of a fixed base salary and a variable component consisting of a bonus based on the employee's performance and a voluntary bonus based on the company's results. At the end of each year, the fixed base salary and the two bonuses are compared with the total already paid out to the employee and adjustments are made accordingly. The sticky part for me comes in here:

"Bis Ende April des jeweils folgenden Kalendarjahres erfolgt die Ermittlung des tatsächlichen Jahresgehalts. Dabei wird die fixe Grundvergütung, der Leistungsbonus nach dem tatsächlichen Zielerreichungsgrad und der freiwillige Erfolgsbonus mit der Summe der geleisteten monatlichen Zahlungen verglichen und die Differenz ausgezahlt oder mit anderen Entgeltbestandteilen verrechnet.
Nachzahlungen werden zum Ende des Kalendermonats fällig und in diesem Kalendermonat verrechnet."

I read this to mean that die Differenz (difference owed to the employee) will be paid out or settled through other compensation/remuneration.
Nachzahlungen (differences owed to the employer) are be payable at the end of the calendar month (the month in which the computation is made or in which the employee is notified) and will be deducted from the employee's salary in that month.

I would greatly appreciate confirmation or correction if my understanding of this is off.
Beth Kantus
United States
Local time: 14:42
English translation:Yes
Explanation:
It sounds like they have estimated what the employee would make if the bonus targets that correspond to the corporate and personal performance targets are met, and they are paying this estimate out monthly in order to avoid an unfavourable tax treatment of a lump-sum bonus payout. If, once the performance number are in, there are discrepancies between what was paid and what should have been paid, then the adjustments are made accordingly.
HTH


Selected response from:

Michael Sebold
Canada
Local time: 14:42
Grading comment
Thanks for the confirmation!
4 KudoZ points were awarded for this answer

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Summary of answers provided
4 +2YesMichael Sebold


  

Answers


9 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
Yes


Explanation:
It sounds like they have estimated what the employee would make if the bonus targets that correspond to the corporate and personal performance targets are met, and they are paying this estimate out monthly in order to avoid an unfavourable tax treatment of a lump-sum bonus payout. If, once the performance number are in, there are discrepancies between what was paid and what should have been paid, then the adjustments are made accordingly.
HTH




Michael Sebold
Canada
Local time: 14:42
PRO pts in pair: 283
Grading comment
Thanks for the confirmation!

Peer comments on this answer (and responses from the answerer)
agree  Erik Macki
1 hr
  -> Thanks again, Erik.

agree  xxxsixxxter1
1 hr
  -> Thank you.
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