What is total compensation?
Total compensation includes not only base salary, but also all monetary and non-monetary benefits, such as bonuses, allowances, cafeteria benefits or other forms of compensation.
An employee’s actual compensation therefore consists not only of monthly base pay, but also of all elements that represent financial or other value.
What can total compensation include?
The elements of a total compensation package may vary from organisation to organisation, but typically include:
- base salary
- bonuses
- allowances
- cafeteria benefits
- share-based compensation
- other monetary or non-monetary benefits
Companies often use a combination of these elements to build their overall compensation system.
Why is it important from a pay transparency perspective?
From a pay transparency perspective, it is important that the assessment of gender-related differences covers not only base salary, but total compensation as a whole.
This is because significant differences may appear not only in salary, but also in variable compensation or other benefit elements.
A transparent compensation system can help organisations develop more consistent and objective compensation practices.
Official definition
Total compensation refers to all monetary and non-monetary benefits provided to an employee.
Frequently asked questions
What does total compensation mean?
It refers to all monetary and non-monetary benefits provided to an employee.
What can be included in total compensation?
For example base salary, bonuses, allowances, cafeteria benefits or other forms of compensation.
Why is this important from a pay transparency perspective?
Because compensation differences may appear not only in base salary, but also in additional benefits.
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