Introduction You can generally deduct the pay you give your employees for theservices they perform for your business. The pay may be in cash,property, or services. It may include wages, salaries, vacationallowances, bonuses, commissions, and fringe benefits. This chapter provides information about deductions allowed forvarious kinds of pay. Chapters 3,4, and 5 provide additionalinformation about the treatment of certain benefits you furnish toemployees. For information about determining who is an employee and aboutemployment taxes on your employees' pay, see Publication 15,Circular E, Employer's Tax Guide, and Publication 15-A,Employer's Supplemental Tax Guide. Forinformation about deducting employment taxes paid on your employees'wages, see chapter 9. TaxTip: You can claim the following employment credits if you hireindividuals who meet certain requirements. Empowerment zone employment credit. Indian employment credit. Welfare-to-work credit. Work opportunity credit. However, you must reduce your deduction for employee wages bythe amount of any employment credits you claim. For more informationabout these credits, see Publication 954,Tax Incentives forEmpowerment Zones and Other Distressed Communities.