Written by Fmi.Online Monday November 14, 2022
 Remuneration is a payment received in exchange for services provided. It is a sum of money that serves a compensational purpose.


In an organizational context, remuneration is given to individuals in exchange for services provided either as employees or as independent contractors. These remunerations can be variable or fixed depending on the nature of the agreement. Some remunerations are variable by nature, as in the case of technicians and occasional hires like for maintenance tasks or one-time jobs. In other cases variable remunerations are calculated based on the number of hours worked at a predefined hourly rate.In other cases, remunerations are fixed, as in the case of salaried employees. On the other hand, these employees can also have both fixed and variable remunerations when the compensation structure defined by the company that hired them includes items like commissions and bonuses.These remunerations are subject to taxation and in some cases these taxes are directly deducted from the payment. Overall, the total remuneration an individual receives can contain different items like wages, commissions, bonuses, stock options and any other economic incentive.

In a nutshell:

  • Remuneration is the total amount an employee receives for performing a job.
  • Remuneration includes not only base salary but all other forms of financial compensation an employee receives.
  • A company contribution to a retirement plan is deferred compensation, and as such is a component of remuneration.
  • At the executive level, remuneration may include a combination of salary, stock shares, bonuses, and other financial compensation.
  • For employees in service jobs, tips are considered part of remuneration.
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