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What is Remuneration?

Tricia Christensen
Tricia Christensen
Tricia Christensen
Tricia Christensen

Remuneration is another term for employee pay. There are a number of ways a company might recompense an employee for work beyond a standard wage or salary. These methods of paying include offering benefit packages, health insurance, stock options, time off of work, among many others.

Basic remuneration is the employee's salary or wage, which may be computed in several different ways. The employee may receive an hourly wage, and gets paid specifically for hours worked. Other employees get a salary or set amount of pay per month, twice monthly, bi-weekly or per year, no matter how many hours they work. Many sales employees work on a commission basis and may only make money if they sell products and/or services. Others have a base salary they draw, in addition to added commission based on their sales.

Remuneration might be given to employees battling an illness.
Remuneration might be given to employees battling an illness.

In addition to salary or wages, many companies offer additional types of remuneration, especially to full-time employees. One type is to give a certain amount of paid vacation or sick days per year. Some countries mandate that employees receive a specific amount of time off, and other countries don’t have such mandates but still have many employers who give this time to employees each year. Amount of time, when not mandated, may vary and often increases the longer an employee stays working for a specific employer.

Management positions commonly have fixed salaries for the jobs offered by the company.
Management positions commonly have fixed salaries for the jobs offered by the company.

Another form of remuneration is health insurance, which is not offered by all companies and varies as to quality and cost. Companies typically pay part of the insurance premium. Health insurance may or may not extend to immediate family members like spouses and minor children. Dental and life insurance could also be offered as part of a remuneration package.

Staff remuneration includes paid days off to take care of sick children.
Staff remuneration includes paid days off to take care of sick children.

Other types of benefits that are part of remuneration could include ability to invest in company stock, or to create 401ks where the company matches some of the employee’s contribution. This can help increase the employee's ability to save money, though companies usually have a matching limit such as three or five percent. Company stock investment can be good or bad remuneration — if the company is not yet public but plans to go public, being able to buy stock early, should the company be successful, can be a wealth building strategy. Strong public companies with rising stock values may prove to be a good investment.

Employees are usually given sick days and vacation days each year.
Employees are usually given sick days and vacation days each year.

There may be additional forms of remuneration that are frequently classed as fringe benefits. Employees might have education costs reimbursed, they could have access to company owned vacation spots, or be given a company credit card. With the exception of education programs, luxury benefits are usually only available to executive employees.

An employee can determine total pay plus benefits by adding together all things the employer pays with salary. By adding insurance contributions, matching 401ks, funds paid for education, vacation days and so on, an employee can calculate total remuneration paid per year by their employer.

Tricia Christensen
Tricia Christensen

Tricia has a Literature degree from Sonoma State University and has been a frequent WiseGEEK contributor for many years. She is especially passionate about reading and writing, although her other interests include medicine, art, film, history, politics, ethics, and religion. Tricia lives in Northern California and is currently working on her first novel.

Learn more...
Tricia Christensen
Tricia Christensen

Tricia has a Literature degree from Sonoma State University and has been a frequent WiseGEEK contributor for many years. She is especially passionate about reading and writing, although her other interests include medicine, art, film, history, politics, ethics, and religion. Tricia lives in Northern California and is currently working on her first novel.

Learn more...

Discussion Comments

vogueknit17

It seems like you could define remuneration as the exchange of money from employer to employee; within that, things like stock options, wages, and bonuses are all different forms of remuneration. That makes it sound simpler, at least to me.

ForMiles

So it's almost like a kind of compensation for working?

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    • Remuneration might be given to employees battling an illness.
      By: jinga80
      Remuneration might be given to employees battling an illness.
    • Management positions commonly have fixed salaries for the jobs offered by the company.
      By: olly
      Management positions commonly have fixed salaries for the jobs offered by the company.
    • Staff remuneration includes paid days off to take care of sick children.
      By: Hallgerd
      Staff remuneration includes paid days off to take care of sick children.
    • Employees are usually given sick days and vacation days each year.
      By: Boggy
      Employees are usually given sick days and vacation days each year.
    • Paid maternity leave is an example of remuneration.
      By: DNF-Style
      Paid maternity leave is an example of remuneration.
    • A sales team may be paid a base salary and commission.
      By: DragonImages
      A sales team may be paid a base salary and commission.
    • An employee's salary is only one aspect of his or her remuneration.
      By: Diana Valujeva
      An employee's salary is only one aspect of his or her remuneration.