HR Glossary  >   What is Remuneration?

What is Remuneration?

Remuneration means all the money and other benefits an employee gets from their job. This includes their regular pay, any extra bonuses, money for working extra hours, and other types of monetary rewards from their employer.

Job perks are different from remuneration. There are extra benefits like having a gym at work or getting a lot of vacation days, but they don't directly give money to the employee. Remuneration can also include benefits that have a money value and are taxed, like using a company car for personal reasons.

Understanding Remuneration

Remuneration means the total payment and benefits someone gets from their job.

For high-level jobs, like executives, remuneration can include special things like options to buy company stock, bonuses, money for expenses, and other extra benefits. These are usually listed in the job contract.

How much someone gets paid and what's included depends on several things:

  • How important the employee is to the company. If they have skills that are very needed, they're likely to get more extra benefits.
  • The kind of job it is. Some jobs pay a regular hourly rate or a set salary, while others might have a basic pay plus extra money from sales, bonuses, or tips.
  • How the company runs its business. Some companies are known for giving their employees a lot of extra benefits like bonuses, stock options, and matching what they put in their retirement plans. Other companies might not offer so many extras because it's too expensive for them.
  • The overall job market and economy. When there are lots of jobs and not enough skilled people, companies offer better pay and benefits to attract the best workers.


Difference between Remuneration and Salary

Salary is one kind of payment. For many people, what they get paid (salary) and their total earnings (remuneration) are the same thing. They either get a regular amount for each hour they work or a set amount every month.

But for some people, their salary is just a part of their total earnings, and sometimes it's a small part.

Like, salespeople might have a small fixed salary, but they mostly make money from extra payments they get when they sell things.

People working in finance, like on Wall Street, usually have a small basic salary. They make most of their money from a big bonus they get once a year. This bonus depends on how well they work and how the company does.

Restaurant servers are often paid a very small amount per hour, as low as $2.13. The idea is that their hourly pay plus the tips from customers should be at least around $5.15 per hour.

Frequently Asked Questions

1. What is total remuneration?

Total remuneration is the annual remuneration package that is paid to the employees, including both financial and non-financial compensations. It generally includes the base salary, bonuses, PF plans, and other non-financial compensation benefits like health insurance, time-off, gym, and club memberships.

2. What are the types of remuneration?

Remuneration can be categorized into two:

Direct: They include all the financial compensations like base salary, bonus, and incentive pay.

Indirect: They include all the non-financial compensations like insurance, health check-ups, memberships

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