non-qualified deferred compensation (NQDC)

A type of retirement contribution that has been earned by an employee but not yet paid by the employer. Because the employee has not received the compensation it is not counted as taxable income ("deferred"). Non-qualified deferred compensation plans are often used to compensate employees with high salaries because of restrictions placed on contributions placed on standard pension plans and tax-qualified profit sharing plans. "Non-qualified" refers to this type of compensation not having the same income tax benefits that qualified retirement plans have. See also deferred compensation.