What is the total remuneration?

Total remuneration  is the full amount of an employee's annual compensation package.  Typically, it includes base salary (or wages), bonuses, commissions, stock options and pension plans, as well as other financial compensation and non-financial benefits (gym memberships, etc.).

The total remuneration is taxable, so the employer  must withhold income taxes  and other payroll taxes and   report them on the employee's W-2 form .

What is the meaning of total remuneration package?

A total remuneration package means that the employer has set a policy that explains how they will compensate an employee. A total remuneration package includes both financial and non-financial compensation and is considered taxable.

The total remuneration package policy of the organization is formulated keeping in mind the following factors:

• The philosophy or value of fairness and equality
• Business strategy
• Budget
• Sustainability Goals
• A desire to improve employer-to-employee relationships
• Investment in and efficient use of recruitment and training costs

What is included in total remuneration?

Total remuneration includes both financial compensation  and  non-financial compensation.

Financial compensation included in total remuneration includes the pre-tax cash value of:

• Salary, hourly wages or piece-by-piece payment
• Incentive Pay, Commissions, and Tips
• Bonus
• Capital option
• Pension Plans
• Social Security  and  Medicare  tax payments
• Transfer Expenses
• board and lodging allowance

Non-financial compensation included in total remuneration may include the following:

• Flexible work hours
• time off
• educational opportunities
• Child Care Assistance
• recognition Award
• catered lunch
• Use of a company car
• Gym Membership
• Mental Health Counseling
• Insurance
• Health insurance
• retirement benefits

The line between non-financial compensation and indirect compensation can be a bit blurred, especially when an organization does not share the cash equivalent of benefits with employees. However, employers have the right to decide which non-financial compensation benefits they include in their total remuneration package.

What are the types of remuneration?

There are two basic types of remuneration (compensation): direct and indirect.

1. Direct remuneration is a different term used to explain financial compensation and includes salary, incentives, bonuses, travel expenses, etc.
2. Indirect remuneration is a different term for non-financial compensation and includes educational opportunities, child care assistance, health insurance, etc.

Employers have the option to provide their employees with either direct or indirect remuneration.

What are the benefits of total remuneration?

The benefits of total remuneration are for both employer and employee, and include:

1. Being a powerful recruiting tool to demonstrate the value of the employer's benefits package
2. Employee satisfaction, as a result of employers being transparent about remuneration and offering equitable, consistent remuneration packages
3. Promote affordable, long-term sustainable investment in pay levels that take into account the market and the role of the employee
4. Improve employee engagement  , performance, productivity and  retention  rates 
5. Encouraging compensation that reflects the organization's values, goals, and strategies by supporting and rewarding employees' actions and behaviors

Employers may choose to provide their employees with   total remuneration details as part of their payroll documents. Doing so has some additional benefits, such as:

• Demonstrating and communicating the genuine investment an employer is making in their employee
• Establishing the value the employer provides to the employee
• Allowing employees to compare their remuneration to the market

What is the difference between total remuneration and remuneration?

Total remuneration includes both financial compensation (wages, incentives, bonuses, tips, pension plans, etc.)  and  non-financial compensation.

Remuneration  includes only  the basic wage or salary and other financial compensations such as bonuses, tips, pension plans, etc., but  excludes non-financial benefits such as medical, psychological and lifestyle benefits  .

What is the difference between salary and remuneration?

Often the terms salary and remuneration are used interchangeably. However, technically there is a difference between the two.

• Salary refers to a fixed, base pay that is paid to an employee for his or her work.
• Remuneration includes base salary, as well as other financial compensation such as commissions, tips, and bonuses.

What is the difference between total remuneration and total compensation?

There is no difference between total remuneration and total compensation. Both these terms mean the same thing. The term remuneration is more commonly used  outside the US  , while the term compensation is more commonly used in the US and Canada.