What Is Financial Remuneration?

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  • Written By: B. Turner
  • Edited By: W. Everett
  • Last Modified Date: 14 September 2019
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Financial remuneration includes all cash or cash-equivalents that are given to employees in exchange for their work or services. It is typically included as part of a total remuneration or compensation package, which includes both financial and non-financial compensation or remuneration. One basic example of financial remuneration would be the weekly pay check issued to a secretary in a business office. The executive officers of that same business could receive multiple forms of financial remuneration, including a weekly pay check, a cash bonus, and stock options.

While most people think of a weekly paycheck when they think of financial remuneration, a wage or salary is just a small part of some worker's compensation packages. Some workers receive an annual bonus for the holidays, or simply to celebrate a year of good service. Others earn a bonus or profit sharing based on how well the company performs each quarter. Some earn commissions that represent a percentage of every sale, while many executives receive stock options that can quickly be transformed into cash if needed. All of these cash and cash equivalents are considered a form of financial remuneration.


In addition to financial compensation, many businesses offer employees some form of non-financial remuneration, which is as a low-cost way to keep employees happy and engaged. This can include simply awards programs, such as an employee of the month program. Non-financial compensation also includes things like vacation time, sick days, and flexible work hours. Firms may offer education and training programs along with insurance and other non-cash benefits. Even striving to create a healthy, balanced work environment can be seen as a benefit to many workers.

Generally, firms attempt to offer a range of short- and long-term benefits to keep employees happy and focused on the job. For new employees, most benefits are relatively short-term in nature, and may be limited to a weekly paycheck. For employees who have been with the company for a long time, the company may offer stock, profit sharing, and other long-term benefits. The total financial remuneration and other compensation offered to employees is determined by factors such as seniority, education, experience, skill, and the number of hours each employee works.

Each business must come up with its own strategy for determining financial remuneration levels. The best strategies allow the company to attract and retain talented employees without detracting too much from company profit margins. When pay is too low, companies will have trouble finding skilled workers, but when pay is too high, the business may struggle to make a reasonable profit.


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