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What Is Fixed Remuneration?

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  • Written By: Terry Masters
  • Edited By: Shereen Skola
  • Last Modified Date: 19 November 2016
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Fixed remuneration is the total yearly compensation that a worker receives regardless of the number of hours he works or the quality of his performance. In most common employment situations, fixed remuneration is another term for a fixed salary or fixed pay. High-level executive payment contracts at the corporate level, however, use the term "remuneration" rather than salary to indicate that a total compensation package can consist of more than just wages.

A worker can be paid by the hour or with a flat fee. Hourly workers are assigned an hourly rate and are paid based on the number of hours worked multiplied by that rate. The greater the number of hours worked, the higher the worker's salary. An employer can have an hourly employee work a certain number of hours at his base rate but is often required by law to pay the employee an additional amount of money if he works over a certain number of hours in a standard time period.

Salaried workers are paid a flat annualized wage, distributed in equal payments. This amount is fixed and does not change, no matter how many hours are worked. In many countries, only certain types of workers can be salaried. For example, in the U.S., executives, administrative personnel, professionals, computer workers and outside salespeople are the only types of workers eligible to be paid a fixed wage. Salary is the basic type of fixed remuneration.

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Ordinary companies tend not to refer to their salaried workers as receiving fixed remuneration. Although "remuneration" simply means pay or compensation, the term is typically reserved for situations where compensation can include a range of valuable items. It is common to encounter the term in the negotiations concerning executive compensation packages for board members and chief executives of major corporations. There are consulting firms that advise major corporations on remuneration policies at this level.

A fixed remuneration package can include wages for services in the form of money. It can also include stock options, fringe benefits and incentives. Almost any other item of value can be included in a fixed remuneration package, such as a special parking space. This compensation can be paid immediately or deferred to a later date, but it is not typically contingent on anything other than the worker holding the position. Once a fixed remuneration package is put in pace for the benefit of a worker, it must be paid without reference to the number of hours worked or the quality of services performed.

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