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December 2010






IRS Announces 2011 Standard Mileage Rates


The 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes were issued last week. The Internal Revenue Service (IRS) announced that the standard mileage rate for business miles driven will be 51 cents per mile, up from 50 cents per mile in 2010.
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
• 51 cents per mile for business miles driven -- (50 cents in 2010)
• 19 cents per mile driven for medical or moving purposes -- (16.5 cents in 2010)
• 14 cents per mile driven in service of charitable organizations -- (14 cents in 2010)
While there was a 1 cent increase this year in cents per mile for business miles driven, the rate (51 cents) is still lower than the rate in 2009 (55 cents) and the second half of 2008 (58.5 cents.)
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Revenue Procedure 2010-51 contains additional details regarding the standard mileage rates.





Survey Shows Compensation Trends in 2010

If you’re wondering about the compensation practices of organizations during this difficult economy, a new WorldatWork survey report provides some answers. For example, nine of out 10 respondents said that their organization has a compensation policy, with 61% having a written policy and 29% having an unwritten policy, according to the report.

The report, released in September 2010, was based on a survey conducted between mid-June to early July. Most of the 1,381 respondents were from large U.S. corporations, according to the report, and 44% were from companies with 5,000 or more employees.

昇給 サラリー調整
Salary Increases, Adjustments
The types of salary increases and adjustments implemented by employers in 2010 were:

Promotional increases (result of higher/greater level of responsibility)—94% (of respondents)
Merit increases—92%
Market adjustments—76%
Internal equity adjustments—64%
Pay differentials (usually related to atypical schedules, hazardous or unsecure work environment, special skill set or responsibilities, etc.)—42%
Temporary special assignment pay—36%
General across-the-board increases not considered cost-of-living adjustments (COLA) or market adjustments—12%
According to the survey report, “Cost of living [adjustments] still dominate many workers’ perception of their raises.” Many workers believe “that these are given to cover a cost of living increase, rather than to reward them for job performance.”

報酬の視点から言えば、物価上昇率だけでは決められない。昇給は従業員を動機付け、維持するツールだ。成果を上げた人と成果を上げない人が同じ昇給率では納得しないだろう。とWorldatWorkのKerry Chou氏(報酬部門リーダー)は述べている。
“From a rewards perspective, it doesn’t make sense to base pay raises solely on the Consumer Price Index,” said Kerry Chou, CCP, compensation practice leader at WorldatWork. “Pay raises are a tool to motivate and retain employees. How motivating can it be for a top performer to receive the same base pay increase as a low or average performer?” The survey found that 25% of respondents noted that they award their top performers twice the average increase; 40% awarding top performers with an increase of approximately 1.5 times the average increase; and 24% awarding 1.25 times the average.

Base salary increases are determined by rating employees’ individual performance against job standards and/or Management by Objectives (MBO) by 89% of the respondents, according to the report.

Market Pay Rate Positions
Looking at the market positions of the respondents’ organizations within their industries, 9% of the organizations set their base pay practice between the 40th and 60th percentiles of the market, according to the report. The report also states that “[m]ore than one-fourth (27%) pays exactly at the 50th percentile and only 10% pay at the 60th percentile or above.” In addition, “including total cash—base and variable pay, 68% pay between the 40th and 60th percentile, with 23% paying exactly at the 50th percentile.”

Also, 58% of the organizations adjust their salary structures annually, with 30% doing so on an “as needed” basis and 9% every 2 years.


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