What does CODA stand for in payroll terminology?

In payroll terminology, CODA stands for Cash or Deferred Arrangement. This term is significant because it relates to retirement plans, specifically the ability of employees to choose between taking cash as part of their compensation or deferring that cash into a retirement account. This arrangement allows employees to plan for their future by saving for retirement while potentially enjoying tax advantages.

The focus on cash or deferral highlights the flexibility provided to employees in how they receive their pay. By understanding this concept, payroll professionals can better assist organizations in managing employee benefits and ensuring compliance with regulations related to retirement contributions.