Remuneration – Definition

Cite this article as:"Remuneration – Definition," in The Business Professor, updated October 15, 2019, last accessed October 19, 2020,


Remuneration Definition

Remuneration refers to the compensation made to someone in exchange for services provided during the course of employment. A person’s salary, bonuses, if any, and economic advantages are all considered to be a part of remuneration.

A Little More on What is Remuneration

Remuneration is the overall compensation that an executive or employee gets. Besides an individual’s base salary, it also includes bonuses, options, expense accounts, and several kinds of compensation. There are many factors that can affect the amount of remuneration received by an employee. They include the extent of services provided by the employee to the firm, part-time vs full-time work, entry level vs managerial position, fixed vs hourly rate, base rate vs commission, tips, etc. Also, the business model of an organization can also affect the final amount of remuneration. There are some companies offering bonus or stock options to employees, and then there are others who don’t. A company can manage hiring an employee from a competitive firm by paying him or her more remuneration. When companies use the same tactic for wooing executives, it is referred to as a golden hello.

There are many people who believe that senior executive officers in some firms receive more than reasonable amounts of remuneration. In case, you are planning to invest in a firm, then you may have to consider this information seriously.

Types of remuneration

Remuneration is the money-based incentives that an employee gets. However, these incentives can be seen in several forms. For instance, there are jobs that pay a fixed rate, and then there are some paying on per hour basis. An employee working in the sales department may receive commission on the basis of number of units or products sold to customers. Some jobs club base salary and commission for arriving at remuneration, while there are some who only compensate individuals in terms of commission. In the food sector, remuneration can include base salary as well as the tips received from customers for the services offered.

Deferred compensation is another form of remuneration that keeps the earnings of an employee aside for being redeemed later. For example, a retirement plan.

Remuneration involves the privileges received by an employee from his or her organization. They include gym memberships, health insurance, getting a mobile phone, data plans, car, etc. based on the firm. Employees can also receive worker’s compensation when he or she hurts or injures themselves while working during the course of employment.

Minimum Wage

The minimum wage refers to the least amount of compensation that an employee receives from his or her employer. Federal law regulates these rates, and they can vary from one province to another, as far as the state amount tends to be more than the federal amount. With the rise in inflation rate, minimum wage rate increases. However, it is not always the same case, and is a matter of big discussions.

References for “Remuneration” › Personal Finance › Career / Compensation › … › Business Law & Taxes › Glossary › Resources › Careers › Compensation

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