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What is Remuneration?

Remuneration is any type of compensation or payment that an individual or employee receives as payment for their services or the work that they do for an organization or company.

It includes whatever base salary an employee receives, along with other forms of payment that accrue during the course of their work, which includes expense account funds, bonuses, and stock options.

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The Amounts and Types of Remuneration

The amount of remuneration an individual receives – and what form it takes – depends on several factors. First, it’s important to note that remuneration values and types will differ depending on an employee’s value to the company.

Taking into consideration things like the individual’s employment status (full time vs. part time) and whether they are in an executive-level position or are an entry-level member of a company makes a significant difference in calculating the final amount.

Also, remuneration can vary depending on how an individual is typically paid, meaning, whether they are a salaried worker if they get paid based on commission, and if they regularly receive tips as a part of the work they do.

It’s also important to note that a lot of companies may try to attract or hire desirable employees from another company by offering them better remuneration, meaning, higher pay, more benefits, and better perks. This business tactic is known as a “golden hello.”

Minimum Wage

Minimum wage is one type of remuneration. It is the lowest amount that can legally be offered for a specific position or to do a certain job. It is maintained by the federal government, and, while minimum wage can vary from state to state or region to region, the lowest amount offered can’t fall below the minimum wage set by the federal government.

Historically, the minimum wage tends to rise with inflation, though this isn’t always the case.

Deferred Compensation

Another type of remuneration is known as deferred compensation. It means that an employee has part of their earnings withheld in order to receive them at a future date.

The best example of this is a retirement fund. When an employee signs up for a retirement fund, a portion of their pay is taken and stored in order to allow them to have funds to rely on once they retire.

Additional Resources

Thank you for reading CFI’s basic guide to remuneration. For further reading on accounting and finance topics, we offer the following helpful resources:

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