Total compensation includes all benefits an employee receives from their job, including non-monetary ones. It’s important to consider all benefits when deciding if a job is a good fit, as they can make the overall package more attractive.
Also known as total compensation, total compensation refers to the cumulative benefits an employee receives as a result of their employment. Benefits include any wages or salary earned, as well as cash bonuses and commissions, personal and sick days, vacation time, and even any type of profit-sharing or stock programs provided by or through the employer. All employee benefits are classified as part of total compensation, including benefits that are non-monetary in nature.
Calculating the total compensation associated with a job position is very important when deciding if a particular position is the best fit. While many people focus on the actual salary or wages involved, other employee incentives can also provide some amount of ongoing benefits. For example, a caregiver’s salary may be somewhat lower than other options, but may include the benefit of being able to live rent-free and not have to pay any utilities. By allowing these additional benefits as part of the overall compensation associated with the job, the rate of pay can be considered more attractive.
Considering all types of employee benefits is key to properly assessing total compensation 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 total compensation in a compensation package will often involve not only salary, but also the possibility of bonuses on a regular basis, profit-sharing opportunities, and possibly the ability to build a retirement plan that involves the stock accumulation. issued by the employer. The scope of benefits involved generally extends well beyond simple salary, and they are likely to play a significant role in attracting the right candidate for the position.
Along with monetary incentives, total compensation will often include non-monetary benefits that help make the job more attractive. For example, a restaurant employee may be entitled to one free meal per shift. Even something as simple as being able to walk to work instead of having to drive or take public transportation can be considered an employee benefit. For this reason, considering both employer-provided benefits and any other advantages the employee sees in the position is very important when considering the feasibility of accepting a position with a particular company.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
