Pay stub tells only part of story

One area where medium and smaller businesses often don't match up with their bigger competitive counterparts is reporting to employees just how much fringe benefits and perks add to their base pay. Even big businesses that do issue annual compensation reports more often than not limit them to the big items such as contributions to Social Security, pension or 401(k) plans, and various health and welfare insurance programs.

Lost in both cases are myriad benefits and perks that can move the financial impact of benefits from the commonly perceived 20 percent to 25 percent above base pay to a whopping 40 percent to 60 percent.

Despite the fact that employers and employees generally agree that reporting the cost of benefits is a positive thing, neither the business owners nor the workers really are dealing with the right numbers.

The reasons often cited for not providing employees total compensation reports are the high costs or the enormous amount of time to build such reports. Not so anymore with self-service reports now available online. Report costs now are as low as $10 (self-service) to $20 (full service) per employee per year, and can be built in as quickly as six minutes per employee on average.

And with systems working from your desktop, or by qualified service bureaus, the process is easy and confidential.

Why let an employee believe he or she is earning only $1 when you've been working hard to provide them $1.30 to $2 worth of employment value.

Total compensation reports are truly the wave of the future. Full disclosure to employees increases employee motivation and financial security.

-- Joe Blattner, CEO, COMPackage.com

Changing law

With the passage of The Small Business and Work Opportunity Act of 2007 in late May, one of the primary areas affected is the Section 179 expensing for small businesses. Section 179 expensing allows a current deduction for a business' assets that otherwise would be subject to normal depreciation rules. The significantly more generous tax break for Section 179 is not only extended through 2010, but also is indexed for inflation.

If Congress had not acted, the dollar limitation would have plummeted to $25,000 and the investment limitation to $200,000 after 2009. Under the new law, the base $100,000 limit ($112,000 as indexed for inflation for 2007) is increased to $125,000 for tax years beginning in 2007 through 2010. Since the deduction is completely phased out under the new levels for qualifying pu rchases above $625,000, the deduction continues to be confined generally to the relatively small business.

The maximum deduction is phased out by the amount by which all qualifying property placed in service during the tax year exceeds the investment limitation. The investment limitation for property placed in service in tax years beginning in 2007 was formerly $450,000, as indexed for inflation. The new law retroactively raises the investment limitation to $500,000 for tax years beginning in 2007 through 2010. The $500,000 amount is indexed for inflation in tax years beginning after 2007 and before 2011.

-- Christine Vann, Alpern Rosenthal, cvann@alpern.com