What Is Total Remuneration?
Also known as total compensation, total remuneration refers to the cumulative benefits that an employee receives as the result of his or her employment. The benefits include any wages or salary that is earned, as well as cash bonuses and commissions, personal and sick days, vacation time, and even any type of profit sharing or stock programs that are provided by or through the employer. All employee benefits are classed as part of the total remuneration, including any benefits that are non-monetary in nature.
Calculating the total remuneration associated with a job position is very important when it comes to deciding if a given position is the best option. While many people focus on the actual salary or wages involved, other employee incentives may also provide some amount of ongoing benefit. For example, a caretaker salary may be somewhat lower than other options, but may include the benefit of being able to live rent-free on the grounds and not have to pay for any utilities. By allowing for these additional benefits as part of the overall compensation associated with the job, the rate of pay may be considered more attractive.
Taking into consideration all types of employee benefits is key to properly assessing total remuneration in any situation. Hourly employees may find the actual pay to be lower, but if that pay is augmented with free health insurance, the overall package may be more desirable. For executives, exploring the total remuneration in a compensation package will often involve not only the salary but the potential for bonuses on a regular basis, profit-sharing opportunities, and possibly the ability to build a retirement plan that involves the accumulation of shares of stock issued by the employer. The scope of benefits involved usually extend far beyond simply the salary, and are likely to play a major role in attracting the right candidate to the position.
Along with monetary incentives, total remuneration will often include non-monetary benefits that help to make the job more attractive. For example, a restaurant employee may be entitled to one free meal per work shift. Even something as simple as being able to walk to work rather than having to drive or take public transportation may be considered a benefit by the employee. For this reason, considering both the benefits supplied by the employer and any other advantages that the employee sees in the position is very important when looking into the feasibility of accepting a position with a particular company.
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